TORONTO, May 21, 2019 /CNW/ - First Cobalt Corp. (TSX-V:
FCC, ASX: FCC, OTCQX: FTSSF) (the "Company") and Glencore AG
("Glencore") have signed a memorandum of understanding to supply
cobalt feedstock and financing to recommission the First Cobalt
Refinery in Ontario, Canada. Upon
execution of definitive agreements, First Cobalt and Glencore will
collaborate on final flowsheet design with a view to accelerating
the restart of North America's
only primary cobalt refinery.
Highlights
- Glencore intends to provide feedstock for the refinery
which is expected to result in annual production of
approximately 2,000 to 2,500 tonnes per annum of cobalt in sulfate
from the refinery
- Glencore will evaluate making a loan to fund the capital
requirements to recommission the refinery and will enter into a
tolling agreement with First Cobalt
- The refinery could be operational in 18-24 months and
discussions are underway with provincial government officials to
identify opportunities to streamline and accelerate the permit
amendment process
Trent Mell, First Cobalt
President & Chief Executive Officer, commented:
"The partnership announced today will help First Cobalt
achieve its stated objective of providing ethically-sourced battery
grade cobalt for the North American electric vehicle market. As the
world's leading producer of cobalt, Glencore is an ideal partner
for First Cobalt. Our shareholders will benefit from Glencore
financial backing, technical support and opportunities for regional
synergies with their Sudbury and
Rouyn-Noranda operations.
"This announcement marks the culmination of one year's work,
bringing First Cobalt closer to generating cash flow and reducing
reliance on the equity markets to fund future advancement of our
North American primary cobalt assets in Idaho and Ontario."
The memorandum of understanding (the "Agreement") between
Glencore and First Cobalt outlines the terms of a partnership to
produce refined cobalt for the North American market. Under the
Agreement, which remains subject to due diligence and definitive
documentation, Glencore will provide First Cobalt with feedstock
material, a loan to cover the estimated capital requirements to
recommission the Refinery and technical support.
A final decision on whether to put the First Cobalt Refinery
back into production has not been made at this time and any
decision is contingent on the outcome of the ongoing discussions
and studies. The Company has not completed a study of the economic
viability of operating the Refinery. Any decision to restart the
Refinery will not be based on anticipated development of any of the
Company's current projects. At this time, the Company does not
anticipate that its current projects will provide a source of
feedstock for the Refinery.
The First Cobalt Refinery is the only permitted primary cobalt
refinery in North America. The
Company recently completed testing of third party cobalt hydroxide
as a potential source of feed, confirming that the existing
processes in the First Cobalt Refinery are capable of producing a
high purity, battery grade cobalt sulfate (see April 3, 2019 press release). With no cobalt
sulfate production in North
America today, the First Cobalt Refinery has the potential
to become the first such producer for the American electric vehicle
market. The Company has signed confidentiality agreements with
several automotive companies interested in securing cobalt for the
North American market.
The First Cobalt Refinery is a hydrometallurgical cobalt
refinery in the Canadian Cobalt Camp, approximately 600 kilometres
from the U.S. border. The First Cobalt Refinery has the potential
to produce either a cobalt sulfate for the lithium-ion battery
market or cobalt metal for the North American aerospace industry or
other industrial and military applications.
A study completed in 2018 by Primero (see October 10, 2018 press release) estimated that
under a 24 tonnes per day (tpd) base case scenario, the refinery
could be recommissioned for approximately US$30 million. The study also considers an
expansion scenario of up to 50 tpd within the footprint of the
current building structure. The study does not comment on the
economic viability of operating the Refinery, and instead is an
estimate of the costs associated with recommissioning. A copy of
the study is available on SEDAR and the Company's website.
A corporate video featuring the First Cobalt Refinery in
Ontario, Canada is available on
the Company's website at
http://www.firstcobalt.com/investors/media-gallery/videos/.
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 exploring a
restart of the First Cobalt Refinery in Ontario, Canada, which could produce 2,500
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% cobalt
equivalent, or an alternative underground-only scenario of 4.4
million tonnes grading 0.3% cobalt equivalent. For further
information regarding the resource estimate for the Iron Creek
Cobalt Project, readers are encouraged to review the technical
report prepared for the Company, dated effective September 18, 2018 (as amended), a copy of which
is available on SEDAR and on the Company's website.
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 Estimates of
Resources
Readers are cautioned that mineral resources are not economic
mineral reserves and that the economic viability of resources that
are not mineral reserves has not been demonstrated. The estimate of
mineral resources may be materially affected by geology,
environmental, permitting, legal, title, socio-political, marketing
or other relevant issues. The mineral resource estimate is
classified in accordance with the Canadian Institute of Mining,
Metallurgy and Petroleum's "2014 CIM Definition Standards on
Mineral Resources and Mineral Reserves" incorporated by reference
into NI 43-101. Under Canadian rules, estimates of inferred mineral
resources may not form the basis of feasibility or pre-feasibility
studies or economic studies except for Preliminary Economic
Assessment as defined under NI 43-101. Readers are cautioned not to
assume that further work on the stated resources will lead to
mineral reserves that can be mined economically. An Inferred
Mineral Resource as defined by the CIM Standing Committee is "that
part of a Mineral Resource for which quantity and grade or quality
are estimated on the basis of limited geological evidence and
sampling. Geological evidence is sufficient to imply but not verify
geological and grade or quality continuity. An Inferred Mineral
Resource has a lower level of confidence than that applying to an
Indicated Mineral Resource and must not be converted to a Mineral
Reserve. It is reasonably expected that the majority of Inferred
Mineral Resources could be upgraded to Indicated Mineral Resources
with continued exploration."
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.