The Ashtray Report on CobalTec: I Am Curious Blue by Roy Berger
Ottawa Ontario – More than half of all Canadian grown-ups have a stock market or mutual fund account. It hasn’t been that way since the great depression. Today they can monitor, buy, sell, panic and freak out at a much greater rate than their financial ancestors with their magic Dick Tracy radio phones.
In this context, I’ve been following the silver and cobalt metal market fairly close. They are each an interesting bullion. For the cobalt story I’ve been trying to figure out who is who and how it works. Cobalt is one of those metals that clings to your magnet when you drag it through the sand at a beach like iron, nickle or steel.
The source of cobalt appears to come down to being mined in nasty ways in nasty places in the middle of the Congo or being mined in ethical North America. Who wants it? Apparently it’s necessary for batteries in that it helps the reactions with lithium. The price of cobalt has doubled in the past six months to about $30 a pound.
The feel good upper class hippie crowd want to glow with pride about their Tesla cars, recycling habits and millennial technology. That feeling appears to be spreading over from not wanting to buy unethical blood-diamonds to not wanting to buy blood-cobalt. Although cash is cash.
So then, if we look at the sources of cobalt in North America we find there really aren’t a lot of mines operating to produce cobalt on a primary basis. Cobalt tends to be more a by-product of mining other metals like copper and silver. It’s junk by comparative value. It’s been dumped as tailings in big piles for decades at a time. It made me remember a time period during 1878 Leadville, Colorado, Cloud City – when these two guys discover that all the abandoned black tailing junk clogging the rockers, mines and piling up everywhere was silver carbonate and worth a fortune.
So there is this particular company that was touted to me called CobalTec ( CSK stock symbol). Formally called Big North Graphite. It’s located in Northern Ontario, in Cobalt, Ontario actually. It has gone through some recent changes, they got a new boss for example, Mr. Bruce Bragagnolo; the company has come alive. They don’t use child slave labour. It’s a funny lesson in economics.
They are not an explorer company. They haven’t produced anything or received cash for inventory. They started off by owning the mining rights to a couple of properties. Then they purchased a bunch more known properties and mining rights by paying off in shares. The price didn’t drop because the properties were legit, I guess. I’ve been through a lot of stocks where the price drops and stays dropped by diluting shares.This doesn’t appear to have happened. Then they bought some more legit properties on the basis of printing up some more shares in exchange.
This CSK has learned how to print money.
Will they produce anything and do they intend to produce anything? They say they will and do. All reports are that that they are legit and have the real stuff. It feels okay.
The price of cobalt could easily crash I guess. It’s been going straight up. The nasty source places could get their social activities and civil wars together. It remains though that the CSK source is on home soil, closer to the end user and located near rail lines.
No one has to buy from CSK. It’s all market driven. It’s possible for someone to come along, buy the company up and wreck it. It’s possible for the stock market to plummet and good stocks to get driven down with bad ones. I don’t have the time and patience to day trade much so I was looking for something that might be fundamentally good. Lately I’ve been experimenting with the Jesse Livermore theory of buying high and selling higher.
Anyway, my action was to buy and hold a handful of CSK shares. Bias up front. A thirty two dollar pouch of Player’s tobacco and a pack of white zig-zags is about equal to the cost of a hundred shares. It’s currently trading around .31-34 cents. Anything can dip…
It has enough high ratings and recommendations that people don’t appear to be dumping it on bad or sideways days. It appears to be holding it’s own.
I thought that with the snow melting and spring that there would be more action and news coming. Might be a good hold til the summer or beyond. I didn’t bet the farm on it, I don’t know if I’d walk a mile for it, but it looked like it might be worth a couple of smokes.
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