TORONTO, Jan. 12, 2021 /CNW/ - First Cobalt Corp.
(TSXV: FCC) (OTCQX: FTSSF) (the "Company") is pleased to announce
long-term cobalt hydroxide feed arrangements with Glencore AG and
IXM SA, a fully owned subsidiary of CMOC, which will provide a
total of 4,500 tonnes of contained cobalt per year to the First
Cobalt Refinery commencing in 2022. Once operational, the First
Cobalt Refinery will be North
America's only producer of cobalt sulfate for the electric
vehicle market.
Highlights
- 4,500 tonnes per year of contained cobalt to be provided from
Glencore's KCC mine and CMOC's Tenke Fungurume mine
- Supply agreements represent 90% of projected capacity for the
Canadian refinery, yielding 22,250 tonnes per year of battery grade
cobalt sulfate
- Securing long term feed from two of the highest quality cobalt
hydroxide operations in the world supports First Cobalt's strategy
of producing the world's most sustainable cobalt for EVs
- First Cobalt's commitment to CIRAF and RMI reporting standards
and lifecycle assessment reporting is in line with the Paris
Agreement and provides European and North American markets with an
attractive regional supply of ethically sourced cobalt for zero
emission vehicles
- Offtake discussions, financing and permitting are on schedule,
supporting commencement of construction in mid-2021
Trent Mell, President & Chief
Executive Officer, commented:
"This is a pivotal moment for our North American cobalt
refining strategy. Our globally competitive cost structure and
industry-leading ESG credentials put us in a strong position for a
rapidly growing EV market. With feedstock arrangements in place, we
can continue to advance our vision to create a new cobalt supply
chain in North America. Electric
vehicle sales in Europe were up
more than 100% in 2020 and the U.S. will be the next large market
to take off. We are now focused on offtake arrangements and the
financing package with the goal of commencing construction in
mid-2021 and full commissioning in the second half of
2022."
Under the terms of a binding cobalt hydroxide supply contract,
Glencore AG will supply the First Cobalt Refinery from the KCC
mining operation in the Democratic
Republic of Congo for five years, commencing in Q4 2022.
First Cobalt has also signed a memorandum of understanding with IXM
S.A. for cobalt from CMOC's Tenke Fungurume mining operation in the
DRC over the same time period. The Company and IXM will work to
complete a definitive contract.
Cobalt hydroxide will be purchased at prevailing market prices,
providing First Cobalt investors with exposure to the cobalt market
and, by extension, a growing EV market.
Together the arrangements will provide 90% of the Refinery's
annual contained cobalt capacity of 5,000 tonnes per annum. The
Company plans to purchase an additional 500 tonnes per annum of
feed at a later date through contract or spot market purchases.
The supply agreements and commencement of shipments are
conditional on First Cobalt obtaining the necessary permits and a
working capital facility. Offtake discussions, financing and
permitting are on schedule, supporting commencement of construction
in mid-2021.
ESG Commitments
First Cobalt is committed to implementing decarbonization
strategies in line with the Paris Agreement. An independent life
cycle assessment (LCA) completed in 2020 confirmed the low carbon
footprint of its Canadian refinery. The report concludes that the
environmental impacts associated with refining cobalt at First
Cobalt's facility will be materially lower than the published
impacts of other leading refiners. In particular, the carbon
footprint generated through the production of one kilogram of
cobalt sulfate from First Cobalt's production process is projected
to be 50% lower than the benchmark cobalt facility. This important
attribute is enhanced by buying feed from mining operations that
are operated with clean hydroelectric power, resulting in a low
carbon product from the mine through to the refined product.
Glencore, CMOC and First Cobalt are members of the Cobalt
Institute, which will be leading a cobalt industry LCA project,
demonstrating the industry's commitment to ongoing
decarbonization.
The Company will provide a clean and ethical supply of cobalt
for the EV market. KCC and Tenke Fungurume are large,
commercial mining operations that provide ethically sourced cobalt
and the highest quality cobalt hydroxide globally. First Cobalt
will qualify the First Cobalt Refinery under the Responsible
Minerals Initiative (RMI). RMI is one of the most utilized and
respected resources for companies from a range of industries
addressing responsible mineral sourcing issues in their supply
chains. A central tenet of the RMI is application of the OECD Due
Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas. Glencore's KCC mine will
undergo a RMI audit early this year as part of its commitment to
the RMI.
The Cobalt Institute has developed the Cobalt Industry
Responsible Assessment Framework (CIRAF), an industry-wide risk
management tool that helps cobalt supply chain players identify
production and sourcing related risks. This long-term strategic
cobalt partnership includes a commitment to apply CIRAF in annual
public reporting on environmental and social issues specific to the
cobalt supply chain. The Company believes that this and other ESG
practices will help it establish a premium brand of cobalt sulfate
for the electric vehicle market.
Project Overview
In December 2020, the Government
of Canada and the Government of
Ontario announced a joint
$10 million investment in the First
Cobalt Refinery, which will help accelerate the commissioning and
expansion. The First Cobalt Refinery is a hydrometallurgical cobalt
refinery located north of Toronto,
in the community of Temiskaming Shores. The facility was permitted
in 1996 with a nominal throughput of 12 tonnes per day and operated
intermittently until 2015, producing cobalt, nickel and silver
products. In May 2020, the Company
completed an engineering study that confirmed the Refinery's
suitability to treat cobalt hydroxide at an expanded throughput of
55 tonnes per day to produce a high purity, battery grade cobalt
sulfate. Today, approximately 80% of global supply comes from
China and there is no production
in North America.
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
Neither 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". 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.