TORONTO, Aug. 26, 2019 /CNW/ - First Cobalt Corp.
(TSX-V:FCC, OTCQX:FTSSF) (the "Company") is pleased to announce
that it has entered into a US$5
million loan facility with Glencore AG to complete advanced
engineering, metallurgical testing, field work and permitting
associated with a recommissioning and expansion of the First Cobalt
Refinery in Canada. Upon
completion of a positive definitive feasibility study for a 55
tonnes per day ("tpd") refinery expansion in Q1 2020 and subject to
certain other terms and conditions and satisfaction of conditions
precedent, Glencore is prepared to advance an additional
US$40 million to recommission and
expand the Refinery.
Highlights
- US$5 million loan from Glencore
will assess the suitability of the First Cobalt Refinery to treat
Glencore material under a long-term supply agreement to produce
cobalt sulfate for the North American electric vehicle market
- Phase 2 of the work plan envisions a recommissioning of the
Refinery at 12 tpd in late 2020 and Phase 3 is an expansion to 55
tpd in 2021 using the existing site buildings and
infrastructure
- An Ausenco scoping study previously estimated that if the First
Cobalt Refinery operated at 55 tpd, it could produce 5,000 tonnes
per annum of contained cobalt in sulfate assuming cobalt hydroxide
feed grading 30% cobalt
- First Cobalt is concluding a RFP process for the feasibility
study, metallurgy and environmental work with a view to commencing
field work in September
Trent Mell, First Cobalt
President & CEO, commented:
"We are delighted to be working with Glencore to bring a
domestic supply of battery grade cobalt to the North
American market. Subject to the results achieved over the next six
months, both parties would like to target first production in late
2020 and then commission an expanded 55 tpd facility in
2021.
Cobalt prices have increased considerably over the past few
weeks and the outlook for the electric vehicle market remains
exceptionally strong."
On July 15, First Cobalt signed a
term sheet with Glencore AG outlining the framework for a
non-dilutive, fully funded, phased approach to recommission the
First Cobalt Refinery in Canada,
subject to due diligence and other conditions that have now been
satisfied (see July 15 press
release). The loan facility announced today bears interest at LIBOR
plus 5%, with interest payable semi-annually in arrears until
maturity. First Cobalt will have the ability to defer interest and
have it added to the principal amount outstanding on each interest
payment date. The loan has a 2-year term that may be extended by
one year at First Cobalt's election. Subject to regulatory
approval, Glencore may elect to convert all or a portion of the
balance owing to equity at discount to market of up to 15%.
During Phase 1, First Cobalt will complete advanced engineering
and estimating, metallurgical testing, field work and permitting.
In particular, this phase includes delivery of a prefeasibility
study for a 12 tpd recommissioning and a definitive feasibility
study for a 55 tpd refinery expansion. Phase 2 entails
recommissioning the Refinery in 2020 under existing permits at a
feed rate of 12 tpd, which will allow the parties to qualify a
sulfate product with a lithium-ion battery maker. Phase 3 would see
the Refinery expanded to 55 tpd, at which point Ausenco estimates
it could produce 5,000 tonnes (11 million pounds) per annum of
contained cobalt in sulfate. A copy of the Ausenco study is
available on the Company's website at
www.firstcobalt.com/projects/first-cobalt-refinery/refinery-studies.
Upon a decision to proceed to Phases 2 and 3, the Phase 1 loan
would be subsumed into a larger debt accordion facility. The
commercial terms of a supply and tolling arrangement will be
concluded once the parties have received the capital and operating
cost estimates of the feasibility study.
First Cobalt is concluding an RFP process for the feasibility
study, metallurgy and environmental work with a view to commencing
field work in September. A conference call to discuss the plans for
the Refinery will be held in early September.
About the FCC Refinery
The First Cobalt Refinery is a hydrometallurgical cobalt
refinery in the Canadian Cobalt Camp, approximately 600 kilometres
from the U.S. border. 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. Most of the world's cobalt refining capacity is located in
China, particularly the refining
of cobalt sulfate for the EV market.
It is the only permitted primary cobalt refinery in North America. 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.
A corporate video featuring the First Cobalt Refinery is
available on the Company's website at
http://www.firstcobalt.com/investors/media-gallery/videos/.
Readers are advised that a restart of the Refinery will be
linked to a long-term feed supply agreement with Glencore and not
on near-term development of the Company's current projects. A final
decision to put the First Cobalt Refinery back into production is
contingent on the outcome of the feasibility study. While the
Company has completed a scoping study to assess the production
capacity, capital costs and operating costs associated with
bringing the Refinery back into production, a study of the economic
viability of operating the Refinery has not yet been completed.
About First Cobalt
First Cobalt is a North American 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 over
5,000 tonnes of contained cobalt in sulfate per year from third
party feed. First Cobalt's main cobalt project is the Iron Creek
Cobalt Project in Idaho, USA,
which has an inferred mineral resource estimate available on the
Company's website. The Company also controls a significant land
package in the Canadian Cobalt Camp spanning over 100
km2, which contains more than 50 past producing
mines.
On behalf of First Cobalt Corp.
Trent Mell
President & Chief Executive Officer
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". 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.