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Centaur Resources investors back Canada-focused cobalt IPO to hit ASX in October

The same investors who seeded Argentina-focused lithium player Centaur Resources have backed International Cobalt Resources Ltd., which launched a prospectus Sept. 7 ahead of an A$11.2 million IPO on the ASX due Oct. 22 mainly on cobalt with associated gold, copper and nickel across three different provinces and styles of mineralization in Canada.

ICR Managing Director Benjamin Cooper found the assets and has been joined on the board being formed for the IPO by Independent Chairman David Barwick, who has chaired, been managing director or president of over 30 public companies and has brought two mines into production in Canada. Mount Ridley Mines Ltd. Managing Director Ashley Hood is also ICR's nonexecutive director.

Cooper, who is also on the board of, and did the raising for, looming vanadium-focused IPO QEM Ltd., said that when ICR's founding backers gave him a mandate to find some assets in the battery space, he chose assets that could produce cobalt, which was on a "tearaway run" until March when U.S. President Donald Trump ordered tariffs on China, which sent several commodities on a downward spiral.

Shaun Cartwright, managing director of boutique financial services group Viriathus Australia, which is managing the IPO, described ICR as Centaur's "sister company" in as far as they are both battery metals players with the same institutional and sophisticated investors that provided the seed capital, and a number of stockbrokers are bidding into ICR's book.

Low-hanging fruit

Cooper, whose experience is in providing corporate advisory and capital finance requirements to emerging miners, chose assets in parts of Canada where historical mining had revealed there would be "low-hanging fruit" and where equities and property prices were and still are low and "have not caught up with the rest of the world."

ICR bought the Blue Mac project south of Falconridge in Canada's Sudbury District from CBLT Inc. in June, which Cooper's company believes potentially hosts a significant gold and cobalt open-pit deposit but needs ground geophysics, stripping and diamond drilling, which will start post-IPO. CBLT has reported that a newly discovered quartz vein (gold and cobalt) recently returned results including 4% cobalt and 35 g/t gold.

Cooper told S&P Global Market Intelligence that assays for cobalt were high, and the high-grade nature of the gold-cobalt vein makes it a "very high probability for exploration."

The nearby mine with the most pertinent style of mineralization is the Scadding gold project, which was one of Canada's highest-grade gold mines when it was in operation in the 1980s, located 2 kilometers southeast of Blue Mac.

ICR also owns the Dickson project hosting a silver-cobalt vein with pyrite sediments that is 3 kilometers off the town of Cobalt, Ontario, and owns an exclusive option to acquire the Bambino copper-nickel-cobalt project in Quebec.

Bambino is next to several nickel and copper projects showing platinum group elements and cobalt. The project is on the Belleterre-Angliers Greenstone belt, which is prospective for nickel and copper. Quebec also offers up to 38% of refundable tax credits on eligible exploration spend.

Cooper said there is an added benefit in Bambino in that the nickel sulfides found there are able to produce the class A nickel units that can be used in batteries as opposed to Australia's laterites that are mainly used in stainless steel.

Yet cobalt is undeniably the focus. The London Metal Exchange cobalt price more than quadrupled from February 2016 to March 26, 2018, from US$21,750/t to US$93,750/t, and the fundamentals look strong with 98% of it derived as a byproduct from either nickel or copper, mostly the latter in the Democratic Republic of the Congo. Yet still, Cooper said, "People don't quite understand yet in the lithium-ion revolution that without cobalt, you don't have a lithium battery ... you don't have Tesla."

"We need cobalt because it's the single determinant in a lithium-ion battery that stops it from overheating and blowing up and provides range for the batteries to put in electric vehicles," Cooper said.