The upcoming 2018 rise in cobalt prices to new all-time highs of above $100,000 per metric ton, not only makes U.S. Cobalt (TSXV: USCO) practically a sure thing to test its key breakout point of $1.18 per share in the weeks ahead (a level that once surpassed will likely cause USCO to immediately explode to a very minimum of $1.50 per share and possibly as high as $3 per share within the following 48-72 hours) – but it also makes Elon Musk a sure thing to have a panic attack from the likelihood of it destroying his capital base that he so desperately needs to retain for combating global warming while simultaneously funding his dream of making humans a multi-planetary species.
The lithium-ion batteries used today to power Teslas and the high performance electric vehicles produced by BMW – contain 21 kilograms of cobalt. Earlier this month, before cobalt exploded by $4,500 to a new decade high of $79,750 per metric ton, Bloomberg published an article about how automakers are beginning to feel the cobalt crunch. When BMW first revealed in October 2016 that it was designing electric versions of its X3 SUV and Mini, its cobalt raw material costs per vehicle were only $600.
Their cobalt raw material costs had already reached $1.700 on January 11th when Bloomberg published this article – and today it is now up to $1,800! That’s correct, the cost for Tesla and BMW to secure the cobalt raw materials needed for the lithium-ion batteries used in their electric vehicles have TRIPLED in 15 months to $1,800! In the low margin automobile manufacturing business, a $1,200 cost increase is a BIG deal!
In 2018, USCO is set to become the first ever company to build a 43-101 compliant cobalt resource at a high grade primary cobalt project located in North America! Right now, 60% of the cobalt produced globally comes from Congo and shares of the #1 cobalt explorer in Congo: Katanga Mining (TSX: KAT) have gained over 1,350% over the last twelve months – with its market cap surpassing $5 BILLION! USCO’s current market cap at $0.85 per share is only $42.755 million! This will NOT last!
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