Published: April 5, 2019 |

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Cobalt sulfate produced using First Cobalt Refinery flowsheet.
[Click image to enlarge]

First Cobalt has successfully produced a battery grade cobalt sulfate using the First Cobalt Refinery flowsheet. This significant milestone brings the company closer to recommissioning the only permitted primary cobalt refinery in North America. With this information, discussions currently underway with automotive companies, cobalt miners and capital providers can now move to a more advanced stage.

Highlights:

• Product assayed 20.8 percent cobalt, surpassing the reference grade for sulfate pricing

• Product classified as “high purity”, achieving over 99.9 percent purity

• Test work carried out in single batches, offering ample opportunity to improve product specifications to meet offtake partner requirements through process optimization

• Potential to produce up to 2,000 tonnes of cobalt in product per annum as the process excluded use of autoclave circuit, allowing for increase in plant throughput

• Near term cash flow potential 18-24 months from sourcing of feedstock, milestone advances these negotiations, as well as offtake discussions

Trent Mell, President & Chief Executive Officer, said:

“Producing a battery grade cobalt sulfate is one of our most significant accomplishments as the majority of refined cobalt for the electric vehicle market is produced in Asia. With no cobalt sulfate production in North America today, First Cobalt stands to become the first such producer for the American electric vehicle market.

For our shareholders, this development brings us closer to cash flow and will be our top priority in the year ahead. Third party studies have confirmed that the permitted facility could be recommissioned in 18-24 months. Furthermore, the cobalt hydroxide used in these tests is currently sold at approximately 60% of the prevailing cobalt price which could offer good margin opportunities based on the findings of the previously released restart study.

We are encouraged by the interest shown in this strategic asset by cobalt miners and EV companies alike and intend to move swiftly to secure long-term feed supply and offtake contracts. We are currently exploring a number of non-dilutive financing options for the capital requirements to restart the facility. We intend to have further updates on all aspects of the project over the next quarter as we complete these discussions.”

Henrik Fisker, First Cobalt Director and Chairman and CEO of Fisker Inc. said:

“Electric vehicle demand in North America will keep growing as companies such as Fisker Inc. continue to introduce new, affordable EV models to the market. Automakers and battery manufacturers have a responsibility to ensure any materials we use in our batteries are sourced in an ethical way. The First Cobalt team is dedicated to ensuring projects maintain the highest standards of ethical mining practices and environmental protection. The restart of the First Cobalt Refinery is an important step towards producing battery materials in America with a clean record from mine to machine.”

The First Cobalt Refinery is the only permitted primary cobalt refinery in North America and is ideally suited to treat North American arsenic-rich mine concentrate. Given the abundance of this higher grade material in the market, the company has been testing third party cobalt hydroxide as an alternative source of feed.

Today’s results confirm that the existing processes in the First Cobalt Refinery are indeed capable of producing a high purity, battery grade cobalt sulfate.

SGS Canada was engaged to test cobalt hydroxide using the processes in the current refinery flowsheet to assess its suitability as feedstock. Tests simulated the existing circuits to determine the ability to produce a cobalt sulfate heptahydrate (cobalt sulfate), a critical component of lithium-ion batteries.

The current Refinery flowsheet includes an autoclave circuit as well as a number of solvent extraction (SX) lines for treating various elements, followed by product precipitation and filtration stages. Test work concludes that processing cobalt hydroxide feed would not require the reactivation of the Refinery’s autoclaves, providing an opportunity for higher production potential than projected in an independent study prepared by Primero Group. The cobalt hydroxide feed tested in this program had head grades in excess of 20 percent cobalt. By contrast, many other sources of cobalt hydroxide have head grades approaching 30 percent cobalt, providing yet another opportunity for higher production.

Commissioned in 1996, the refinery is located in Ontario, Canada, a few hours north by road or rail from the U.S. border. Once operational, the Refinery would become the only North American producer of refined cobalt for the North American EV market.

Given the strong cash flow projections derived from the Primero Group study, the company believes that a restart of the refinery could be financed by non-equity sources of capital, limiting dilution for shareholders and generating a steady source of cash flow to fund future activities at the flagship Iron Creek Project in Idaho. The company has received significant interest from miners and automotive companies and today’s results will allow these discussions to advance to the next stage. First Cobalt’s objective is secure a long term feed purchase agreement, offtake for the sale of refined cobalt and financing for the capital requirements. It is estimated that the refinery could be operational 18-24 months from the selection of a feed source.

The company has engaged Ausenco, a global consulting, engineering, project delivery and asset operations, management and optimization solutions firm to the minerals & metals, oil & gas and industrial sectors to work in partnership with SGS Canada on this next phase. The next step towards a potential restart of the First Cobalt Refinery will include detailed engineering to assess further refinements to the flowsheet and circuit optimizations to maximize potential output.

The company engaged a third party permitting and environmental consultant to review the state of current permits and timeline for a restart. The review found that the Refinery would require a new permit to take water but that all other major permits are in place. Subject to certain modifications and amendments, it is believed that an 18 to 24-month period would be sufficient to renew and amend all necessary permits to restart the refinery. An order of magnitude cost estimate for the approval process is estimated at approximately $1 million.

With respect to existing tailings capacity, it was noted that the autoclave pond has not been fully constructed and has an estimated 40,000 m3 (approximately 70,000 tonnes assuming a specific gravity of 1.74 tonnes per cubic metre) of remaining permitted capacity yet to be constructed. Operating at 24 tpd, the autoclave pond would reach capacity after eight years. Thereafter, the company could avail itself of 80 acres to the north of the Refinery for additional tailings storage capacity. The primary settling pond is also not yet constructed to its full capacity and it was noted that doing so would improve discharge water quality through additional retention time and increased capacity for water storage.

First Cobalt also engaged a leading cobalt market research company to advise the company on (1) indicative commercial terms for a variety of feedstock options for the refinery, and (2) potential offtake terms for cobalt products after the refining process is completed. The report identified three primary sources of potential feedstock and highlighted the high quantities of ethically-sourced cobalt hydroxide material. The study considered offtake markets for final product as the refinery could produce a cobalt sulfate for the battery market or it could produce cobalt metal for the aerospace, military and industrial sectors. Current indications are that pricing for cobalt sulfate is generally in line with cobalt metal.

About First Cobalt
First Cobalt is a Canadian-based pure-play cobalt company and owner of the only permitted primary cobalt refinery in North America. The company is studying a restart of the First Cobalt Refinery in Ontario, Canada, which could produce 2,000 tonnes of cobalt sulfate or metallic cobalt per year. First Cobalt’s main cobalt project is the Iron Creek Cobalt Project in Idaho, USA, which has inferred mineral resources of 26.9 million tonnes grading 0.11 percent cobalt equivalent, or an alternative underground-only scenario of 4.4 million tonnes grading 0.3 percent cobalt equivalent.

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