Frank Basa (left) is keen to get test samples of cobalt sent off to potential customers
Cobalt, used in three of the four types of batteries typically used in electric vehicles, is primarily produced as a by-product of copper or nickel output, with the majority of that originating in the Democratic Republic of the Congo. The metal is facing an increasing supply deficit, though, which has seen the LME cobalt price increase by more than 100% over the past year.
Castle thinks it has the answer to this supply conundrum through both its mining projects and a technology it is developing to recycle batteries.
Its Castle and Beaver properties were formerly mined for silver but the veins also contain high-grade cobalt, which was overlooked during previous extraction due to the focus on the precious metal. Mines in the greater Cobalt camp produced over 500 million ounces of silver and thousands of tonnes of cobalt in the 20th century.
Silver and cobalt are typically found together in quartz and calcite veins but historical silver production didn’t focus on cobalt mineralisation and the low-grade silver veins were largely ignored, even if they had high-grade cobalt. The Castle property historically produced 9.5Moz silver and at least 136t of cobalt.
Castle’s CEO Frank Basa is a professional hydrometallurgical engineer. More importantly, he worked at Agnico Eagle Mines (CN:AEM) when it operated the Castle mine in the 1980s and developed the Re-2OX process to extract the cobalt from the Castle deposit.
Having acquired the Castle properties seven years ago, Basa is now looking to bring it back online as a primary cobalt operation with a silver by-product.
With plenty of historical drill hole data to fall back on and permits in place, it is one step ahead of a number of other explorers in the camp.
The company is taking a two-pronged approach to exploration. It has received permits to access the old underground workings to undertake bulk sampling on the first level and then underground drilling, which is likely to start in July.
The mine workings have visible cobalt in veins that pinch and swell and continue intermittently for tens of metres. The first level extends about 365m east‐west and 360m north‐south.
The company will also undertake greenfield exploration from surface on targets identified from a recent geophysical IP survey. It plans to drill test these areas later in the year.
Drilling in 2011 in the area where the IP survey was conducted returned high-grade cobalt, with grades such as 0.12m at 1.44% Co. The company aims to produce an initial resource estimate within a year.
Castle potentially has another ace up its sleeve.
Basa thinks the Re-2OX cobalt processing technology he developed can be adapted to extract cobalt from lithium-ion batteries.
Test work is currently underway with SGS Lakefield on the effectiveness of using the Re-2OX process on used lithium-ion batteries and the company expects to have the results soon.
Used telephone and computer batteries with cobalt in them are piling up in warehouses due to a lack of recycling for them in North America, while there seems to be no suitable recylcling solution in Asia either, Basa said.
Electric battery production is increasing rapidly in Asia. Sensing an opportunity, Basa met with battery makers and trading companies in China and Japan last week with the aim of arranging offtake agreements for the Castle mine production and potentially financing a mill at the Castle property.
Basa came back from his trip to Asia with product spec sheets to hand and a sense of real demand for cobalt.
"There is no way that they [cobalt producers] will be able to meet the demand," he told Mining Journal.
The trip has also made him realise he may need to speed up the bulk sampling at Castle in order to start the product qualification process. This is likely to lead to the company carrying out resource drilling and develop its product at the same time.
“I have a feeling that this is going to move quick. It is best to move with it, or we will get left behind," he said.
"We weren’t planning to do bulk sampling for quite a while and it was only going to be small samples, but right now people are already asking me when am I going to start mining."