TORONTO, Nov. 10, 2020 /CNW/ - First Cobalt Corp. (TSXV:
FCC) (OTCQX: FTSSF) (the "Company") today provided an update
on commercial contracts and metallurgical test work relating to its
cobalt refinery located in Ontario,
Canada.
Highlights
- First Cobalt and Glencore have agreed to discuss a long-term
feed purchase contract rather than the tolling arrangement
originally contemplated, providing First Cobalt greater leverage to
the cobalt market by entering into offtake contracts with end users
directly
- The maturity date on the Company's US$5
million loan with Glencore has been extended by one year to
August 2022, which better aligns with
refinery commissioning
- Glencore continues to provide support to ensure a technically
viable design of the plant and smooth commissioning
- In order to secure a diversity of supply, First Cobalt will
supplement any feed provided by Glencore with other sources of
ethical cobalt
- Bench scale testing of cobalt hydroxide feedstock from
Glencore's Katanga Operation (KCC) yielded recoveries in excess of
97%, significantly higher than the 93% recovery assumption in the
Company's May engineering study
- Timelines for pilot plant completion and submission of permit
amendments remain on track while discussions for government support
are well advanced
Trent Mell, President & Chief
Executive Officer, commented:
"The change in approach towards
feed purchase contracts results in greater exposure to the cobalt
market and potentially a greater share of the project economics
outlined in our May 4 engineering
study. With the decision to be a market purchaser of feedstock,
rather than a toll refiner, the Company has resumed discussions
with lenders and intends to move aggressively to advance its
strategy. I am very appreciative of Glencore's ongoing support and
look forward to working towards completing a mutually agreeable
cobalt hydroxide supply agreement for our refinery. We continue to
advance our vision to create a new cobalt supply chain in
North America, which will provide
excellent leverage to a strengthening cobalt market for First
Cobalt shareholders."
Securing feed material under a long-term cobalt hydroxide
purchase contract, rather than a tolling contract, will allow the
First Cobalt Refinery to be an active market participant and
achieve market-based returns from its operations. This will also
provide First Cobalt shareholders with greater leverage to the
cobalt market. With competitive operating costs and strong ESG
credentials, the Refinery is very well positioned to become an
important global player in the refined cobalt business, a key
component in the growing North American and European electric
vehicle supply chains.
Offtake discussions with OEMs and other cobalt sulfate consumers
have been very constructive, given strong interest in: (i) a
geographically diverse supply chain, (ii) ethically sourced cobalt,
and (iii) a low environmental footprint.
The Company intends to finalize a supply agreement with Glencore
on mutually agreeable terms while securing additional feedstock
from other miners of ethically produced, high-quality cobalt
hydroxide. The Company does not anticipate any difficulties
securing sufficient feedstock for the Refinery's nameplate capacity
of 5,000 tonnes per annum of contained cobalt. Moreover,
diversification of feedstock supply will help offset the risk of
supply interruptions from any single operation.
The US$5 million debt agreement
the Company has in place with Glencore had an original maturity
date of August 23, 2021. The parties
have amended the loan agreement to extend the maturity date by one
year to August 23, 2022. All other
terms are unchanged, including Glencore's right to convert all or a
portion of the balance owing to common shares of First Cobalt at a
discount to market of up to 15%.
Cobalt hydroxide feed material from Glencore's KCC mining
operation was received in September, with leaching and
neutralization testing performed by SGS ahead of pilot plant test
work. Bench scale work yielded cobalt recoveries in excess of 97%,
significantly higher than the 93% recovery reported in the
Company's May 4 engineering study.
The 97% recovery is similar to recoveries achieved on other DRC
cobalt hydroxide feedstock that First Cobalt tested in 2019 to
produce battery grade cobalt sulfate. The Company is confident that
it will meet or exceed this recovery level as it proceeds to pilot
plant testing, which would contribute to even stronger project
economics.
With respect to the Company's conversations with government,
First Cobalt remains optimistic for a positive outcome. The
increasing prevalence of electric vehicles in Canada as well as the integrated nature of the
North American automotive supply chain place First Cobalt at the
center of a generational shift – one that is well aligned with
government policy at the Federal and Provincial levels.
About First Cobalt
First Cobalt owns North
America's only permitted cobalt refinery. Cobalt refining is
a critical component to the development and manufacturing of
batteries for electric vehicles and forms a foundational piece of
the next generation of the North American auto sector and other
electrified consumer and industrial applications. First Cobalt owns
the Iron Creek cobalt project in Idaho,
USA and controls significant silver and cobalt assets in the
Canadian Cobalt Camp, including more than 50 past producing
mines.
On behalf of First Cobalt Corp.
Trent Mell
President & Chief Executive Officer
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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". Forward-looking statements 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. 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 First Cobalt, filed on SEDAR at
www.sedar.com. Although First Cobalt 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, First Cobalt disclaims any intention or obligation
to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.
SOURCE First Cobalt Corp.