Canadian Cobalt Comparison

So two VERY similar neighbouring Cobalt explorers are both awaiting their first drill results.
I thought I'd share my comparison while we wait with bated breath.

As of Monday 17th September 2018:
MTC: $6.78M fully diluted, $1.53M cash + $1.55M tax rebate pending = $3.7M EV
MEI: $15.37M fully diluted, $3.3M cash at last cashflow report (maybe eligible for tax rebate from Midrim, but haven't seen it mentioned) = $12.07M EV

Both have some very saucy historic results, indicating very high grade mineralisation:
MEI:

One of MTC's projects (3 in total):


I'm not going to post every result or compare them because I believe both are similar enough to give the same probability of holding economic deposits. MEI's MD has not been shy in stating their Cobalt focus and I haven't seen any mentions of its old PGE project so I think management don't see any further value in it. MTC has ~10 Lithium projects, most virgin but one drilled and with a 15-25MT at 1-2% independently produced exploration target. This Lithium project (and any others that take off) could be worth according to neighbouring peer comparison anywhere from $55M (SYA's 21.2Mt at a lower grade of 1%) to $450M (TSX listed Nemaska's 37Mt at 1.4%).

As for Cobalt project value for MTC/MEI, ASX peers are few due to them usually being laterite deposits. On the TSX, however, comparable North American Projects can be found. As an example there is Ecobalt at $125M MC.
Note all these are current marketcaps, i.e. after being smashed down 50+% like all Lithium and Cobalt companies have. Anyway, this is Ecobalt:



I chose this company because I believe MEI/MTC should hold comparable size and grade deposits, albeit with the gold credits substituted for silver/nickel. The economics this deposit provided are as follows:


One thing to note is the harsh Cobalt price sensitivities:


Plenty of upside but given the threat of NCM811, I hope ya'll are diversified. Some battery minerals are immune/even benefit from new tech such as solid state batteries which use more Lithium.

I don't like dealing on intangibles but I know it's going to come up so let's talk management. A single glance at both Hotcopper pages will show a massive difference in what people are posting about their sentiment, something reflected in the price differences between these companies. Which is surprising, given both of these companies have done the same things at the same time this year...
Geophysics/Geochemical surveys happened at the same time, and both are at the exact same stage of waiting for assays from their 1st round of drilling. Personally my contact and assessment have concluded to me that both companies have very competent management and geologists and as such I consider both equally capable of finding and developing deposits.

Top 10 is as follows:
MEI:

No. 1 holder (5%) is the well known magnate Tolga Kumova, I couldn't find any directors in the top 20 but there may be some behind the weird names so if you know of any please share.

MTC:

  
No. 1 holder and No. 10 is director/founder Russell Moran at 16.94%, and no. 2 is founder Gino D'anna at 10.38%. No. 3 is a Chinese strategic partner who took a $1.8M stake last year at 18c (128% higher than last traded price, ouch). No. 4 and 5 (7.49%) are land vendors. These 5 are 43.47% alone.

Top holder ownership is usually seen as 'educated' confidence in a company from those who know best. In this case, however, despite the massively higher top ownership in MTC I don't see any reason to have a higher confidence in one of these companies' Cobalt potential than the other given similar geology and geologists. BCC's investment was around the Lithium action time so I'd say it is more indicative of their confidence in that.

The massive difference this top holding will make, however, is the amount of volume turnover required to both increase and decrease the share price (as top holders haven't sold any shares to date in either company), I expect MTC prices to be much more volatile and MEI to be more stable (for better or for worse).

In conclusion, personally my ownership has followed the price discrepancy as I value the Cobalt equally and I couldn't justify money in MEI at the current EV which is a massive 172% more than MTC.
Adding to this, the Lithium at MTC has undoubtable concurrent upside and free diversification, while I was disappointed that MEI has tossed the PGE project aside after all the work that was done.
That said, there's every chance MEI could unearth a world class deposit and be 1000% up to Ecobalt levels before MTC moves and I'll be here looking like an idiot for not paying the extra 172% lol.

I consider both very high quality companies and if the prices reversed (like they did in April) I'd have my money spread across both companies to make sure I don't miss any monsters they find. Both are trading very low volume:

MEI:

MTC:

A few tens of thousands coming in will make either of these fly to massive profits from these levels, and with both expecting assays these are very exciting times. Good luck to all holders!