LICO ENERGY METALS COM NPV (OTCMKTS:WCTXF) is one of those “sweet spot” stories in terms of themes on the OTC. The company’s name, LiCo, refers to the elements Lithium and Cobalt, which just happen to be the two very scarce, very critical components in lithium-ion battery production. The story here is about the company’s recent cobalt strike in its just-released assay results.
The announcement hit as the company reported that 4 of the 7 holes assayed to date have higher than average grades of more than 1% cobalt. Management also reports finding “very good silver and copper results in our assays which is equally exciting.” But, the cobalt is the big one. This news comes on the heels of several reports showing that the cobalt market continues to tighten, leading to higher and higher price estimates as demand for lithium-ion batteries continues to grow.
LICO ENERGY METALS COM NPV (OTCMKTS:WCTXF) is a Canadian based exploration company whose primary listing is on the TSX Venture Exchange. The Company’s focus is directed towards exploration for high-value metals integral to the manufacture of lithium-ion batteries.
WCTXF has entered into a property purchase agreement to acquire a 100% interest from Glencore Canada Corporation (subsidiary of Glencore plc) in the Glencore Bucke Property, situated in Bucke Township, 6 km east-northeast of Cobalt, Ontario, subject to a back-in provision, production royalty and off-take agreement. Strategically, the Glencore Bucke Property consists of 16.2 hectares and sits along the west boundary of LiCo’s Teledyne Cobalt Project. The Property covers the southern extension of the #3 vein that was historically mined on the neighboring Cobalt Contact Property located to the north of the Glencore Bucke Property. Diamond drilling in 1981 on the Glencore Bucke Property delineated two zones of mineralization measuring 150 m and 70 m in length.
The Company is adding additional meterage to the diamond drilling programs than what was originally planned for the Glencore Bucke and Teledyne Properties. LiCo is expecting the drilling contractor to provide a second diamond drill rig later this week. The current drill rig will remain drilling on the Glencore Bucke property, while the second drill rig will be used to test the drill targets identified by management on the Teledyne property.
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There are two other major catalysts that pair up with the company’s most recent announcement to define the importance of the company’s strong cobalt assay results.
First, the London Metals Exchange has started to critically evaluate the labor practices in place in the Democratic Republic of Congo (DRC). It seems there may be a major child labor issue there. That has led to some speculation that cobalt mined in Congo may become ineligible for international trade for a period, which could further tighten supplies given that most of the world’s cobalt currently comes from DRC.
The other big catalyst here is Elon Musk’s recent announcement of Tesla’s move into the Trucking market. If you thought the Model S used a lot of batteries, imagine an eighteen wheeler driving back and forth across the country. Tesla has already received major orders from both JB Hunt and Walmart, and more are likely to follow.
In other words, if you find cobalt outside of the DRC, it’s a big deal. And the company’s latest release suggests that’s exactly what may be going on. Now, we must say: there’s a whiff of “investor awareness” here, but that doesn’t mean it isn’t a strong story. Be aware, but this is likely worth prying into right now.
Traders will note 39% during the past month in terms of shareholder gains in the name, but that move comes in the context of a larger bearish trend. Market participants may want to pay attention to this stock. WCTXF is a stock who’s past is littered with sudden rips. Furthermore, the company has seen interest climb, with an increase in recent trading volume of greater than 210% over the long run average.
At this time, carrying a capital value in the market of $10.7M, WCTXF has a store ($265K) of cash on the books, which is balanced by virtually no total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $WCTXF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $WCTXF, either long or short, and we have not been compensated for this article.