Canaccord Genuity sees long-term value in Australian cobalt miners on EV demand

Sunrise Energy Metals

03/09/2021 03:54

** Canaccord Genuity starts coverage of cobalt miners
Jervois Global  JRV.AX , Cobalt Blue  COB.AX  and hikes PT on
Sunrise Energy Metals  SRL.AX , anticipating surging demand
driven by shift to electric vehicles
    ** Brokerage starts COB coverage with A$0.65 PT, JRV with
A$0.60 and hikes PT on SRL to A$3.00 from A$2.50; rates all
stocks "Speculative Buy"
    ** All 3 companies have cobalt projects in development and
are set to benefit from anticipated long-term demand - Canaccord
    ** JRV set to become second-largest ex-China refiner of
cobalt with 8.5kt of capacity once its SMP refinery in Brazil is
ramped up in 2024 - Brokerage
    ** For SRL, brokerage says if a funding solution is found
for its Sunrise Energy project in NSW, it represents a leveraged
exposure to cobalt and nickel of scale
    ** Canaccord expects electric vehicle demand to consume 32%
of cobalt by 2025 and 50% by 2030
    ** Brokerage sees demand grow from 128kt in 2020 to more
than double to 272kt in 2030; sets long-term price forecast of
$40/lb
    ** Canaccord expects market to be balanced on a knife's edge
until 2024 when it enters a structural deficit; as deficit
approaches brokerage expects a scramble to secure supply and
rapidly rising prices

 (Reporting by Arundhati Dutta in Bengaluru)
 ((Arundhati.Dutta@thomsonreuters.com))