Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V:
ELBM) (“Electra” or the “Company”) is pleased to announce that
the Company and the holders of US$51 million principal amount of
8.99% senior secured convertible notes have agreed that all accrued
interest owing to August 15, 2024, on the convertible notes will be
“paid-in-kind,” not in cash, and added to the outstanding principal
amount of the notes. As a result of this agreement, the Company
will issue additional notes in the principal amount of US$6.5
million. The Company also announces the filing of its second
quarter financial results.
David Allen, Electra’s CFO, said regarding the noteholder
agreement, “We are grateful for our lenders’ continued support of
our vision and business plan. This agreement allows us to preserve
liquidity and allocate capital towards funding the completion of
the cobalt refinery project rather than paying interest in
cash.”
Electra’s CEO, Trent Mell, said “The cobalt refinery continues
to be our primary focus, with the objective of resuming
construction shortly after funding is secured. We have maintained
rigorous management of our financial resources throughout the
quarter and the recent agreement with our lenders further reflects
this rigor. The Canadian Refinery is our flagship asset and will be
the first of its kind in North America. Beyond refining cobalt
hydroxide to produce cobalt sulfate for the battery market, we are
exploring battery recycling to close the loop within the supply
chain. In June, the Government of Canada entered a $5 million
funding agreement with Electra to support the next phase of our
battery recycling program. This continued support demonstrates a
recognized importance of onshoring the battery supply chain and
reducing reliance on China.
“Recent market reports have alluded to a slowing of EV growth
rates for some EV manufacturers, but the outlook remains
exceptionally strong,” Mell continued. “With global demand for EVs
expected to increase by 22% in 2024, according to Rho Motion, and
more than 90% of cobalt chemical, the material used for batteries,
coming from refineries in China, the urgency to diversify the
supply chain to meet the growth challenges ahead is becoming more
pressing.
Mell concluded, “Through our partnerships with ERG and Glencore,
we have secured feed material to meet the full capacity of our
refinery. Customer demand for our cobalt sulfate production far
exceeds our production capacity and LG Energy Solutions has already
secured up to 80% of our production. We are strategically
positioned to be a foundational component of the North American
battery supply chain.”
The 8.99% senior secured convertible notes were issued pursuant
to an indenture dated February 13, 2023, entered into among the
Company, GLAS Trust Company LLC, as trustee for the notes and the
noteholders. A supplemental indenture to the note indenture will be
entered into which will govern the additional notes, a copy of
which will be filed on SEDAR+ at www.sedarplus.com and with on
EDGAR at www.sec.gov.
The payment in kind and the issuance of additional notes is
subject to certain conditions, including the approval of the TSX
Venture Exchange.
The Company’s cash balance at the end of the quarter was C$4.8M.
The Company’s second quarter 2024 financial reports are available
on SEDAR+ (www.sedarplus.com) and the Company’s website
(www.ElectraBMC.com).
Electra’s is recommissioning and expanding its refinery, and its
long-term vision includes additional phases to potentially provide
recycled battery materials and battery grade nickel to the North
American and global electric vehicle battery market:
- Completion of the recommissioning of the refinery to produce at
an initial rate of 5,000 tonnes per annum of battery cobalt
contained in cobalt sulfate from cobalt hydroxide.
- 12-month permit amendment process and expansion of certain
circuits to increase cobalt production to 6,500 tonnes per annum of
battery grade cobalt sulfate, reaching the nameplate capacity of
the crystallization circuit.
- Recycling of black mass, recovering lithium, nickel, cobalt and
other critical metals, supported by a planned joint venture with
the Three Fires Group to collaborate to source battery waste and
produce black mass for refining at Electra’s refinery.
- Expansion to a second cobalt sulfate facility in Bécancour,
Quebec and a strategically located North American nickel sulfate
refinery.
Throughout 2023, Electra operated a plant scale battery
recycling trial at its refinery, processing more than 40 tonnes of
black mass material to recover valuable elements such as lithium,
nickel, cobalt, manganese, graphite, and copper. The goal was to
make high-quality nickel, cobalt, and lithium products. While the
current phase of the recycling project is now largely complete,
ongoing work aims to unlock additional value from the final
saleable products and completed advanced engineering studies.
Electra’s low carbon hydrometallurgical refinery in Canada is
permitted and has an estimated current replacement value of
approximately US$200 million. The Company requires approximately
US$60 million to complete construction. The cobalt refinery project
continues to be derisked through the on-site receipt of most long
lead-time equipment and by the 2023 commissioning of the legacy
refinery operations for the black mass demonstration plant.
About Electra Battery Materials
Electra is a processor of low-carbon, ethically-sourced battery
materials. Currently focused on developing North America’s only
cobalt sulfate refinery, Electra is executing a phased strategy to
onshore the electric vehicle supply chain and provide a North
American solution for EV battery materials refining. Keys to its
strategy are integrating black mass recycling, expanding cobalt
sulfate processing into Bécancour, Quebec, and exploring nickel
sulfate production potential within North America. For more
information, please visit www.ElectraBMC.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and
forward-looking information (together, “forward-looking
statements”) within the meaning of applicable securities laws and
the United States Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, are
forward-looking statements. Generally, forward-looking statements
can be identified by the use of terminology such as “plans”,
“expects”, “estimates”, “intends”, “anticipates”, “believes” or
variations of such words, or statements that certain actions,
events or results “may”, “could”, “would”, “might”, “occur” or “be
achieved”. Such forward-looking statements include, without
limitation, statements regarding completion of the issuance of the
Interest Notes and the approval of the TSXV. Forward-looking
statements are based on certain assumptions, and involve risks,
uncertainties and other factors that could cause actual results,
performance, and opportunities to differ materially from those
implied by such forward-looking statements. Among the bases for
assumptions with respect to the potential for additional government
funding are discussions and indications of support from government
actors based on certain milestones being achieved. Factors that
could cause actual results to differ materially from these
forward-looking statements are set forth in the management
discussion and analysis and other disclosures of risk factors for
Electra Battery Materials Corporation, filed on SEDAR+ at
www.sedarplus.com and with on EDGAR at www.sec.gov. Other factors
that could lead actual results to differ materially include changes
with respect to government or investor expectations or actions as
compared to communicated intentions, and general macroeconomic and
other trends that can affect levels of government or private
investment. Although the Company believes that the information and
assumptions used in preparing the forward-looking statements are
reasonable, undue reliance should not be placed on these
statements, which only apply as of the date of this news release,
and no assurance can be given that such events will occur in the
disclosed times frames or at all. Except where required by
applicable law, the Company disclaims any intention or obligation
to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814641668/en/
Heather Smiles Vice President, Investor Relations &
Corporate Development Electra Battery Materials info@ElectraBMC.com
1.416.900.3891
Electra Battery Materials (NASDAQ:ELBM)
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