TORONTO, March 17, 2020 /CNW/ - First Cobalt Corp.
(TSX-V:FCC, OTCQX:FTSSF) (the "Company") today provided an
update on its refinery feasibility study and commented on its
business plan in light of recent market developments.
HIGHLIGHTS
- Refinery studies nearing completion, including a
prefeasibility study for a restart of the First Cobalt Refinery and
a definitive feasibility study for an expansion scenario
- Offtake discussions are underway, with several
automotive companies interested in a North American supply of
battery grade cobalt
- Refinery capital cost is not dependent on equity
markets and is expected to be funded by one or more corporate,
private equity, debt and government counterparties
- Strong balance sheet with sufficient cash on hand
for the next 12 months and additional funds remaining from a
Glencore advance to continue work on the refinery
Trent Mell, First Cobalt
President & CEO, commented:
"We are in the final stages of a feasibility study designed
to validate previous work demonstrating that the First Cobalt
Refinery can become the only North American refiner of cobalt for
the battery market. Given that most of the world's cobalt sulfate
production capacity is located in China, this facility will play a unique role
in the North American electric vehicle revolution.
"First Cobalt has a strong balance sheet and sufficient
capital for at least the next 12 months. We will also have funds
remaining from Glencore loan proceeds to continue with advanced
engineering and permitting activities after completion of the
feasibility studies.
"Market volatility and economic uncertainty due to COVID-19
have put downward pressure on commodities and cast uncertainty over
short term global economic activity. First Cobalt has implemented
modified work practices but work continues on our strategic plan
with minimal impact on our schedule. The EV revolution is a
generational megatrend that will continue to change the way we move
around, regardless of short term market fluctuations. Cobalt
remains essential to an electric future and our partnership with
Glencore will be a competitive advantage as we move towards first
production."
The feasibility study for an expansion of the First Cobalt
refinery is in the final stages and is expected to be concluded in
the coming weeks. Once these studies are complete, we will continue
with test work, further development of detailed engineering, and
work with governments to ensure permits are in place. Discussions
with potential offtake partners continue to advance and the Company
is encouraged by the interest in a North American supply of refined
cobalt sulfate.
In September 2019, First Cobalt
commenced engineering studies, encompassing an interim scenario for
restarting the refinery at its current capacity as well as a
definitive feasibility study on expanding the refinery. A third
study will examine a scenario of first restarting production at
current capacity and subsequently increasing throughput. A scoping
study released in May 2019 concluded
that the First Cobalt Refinery is capable of producing over 25,000
tonnes per year of battery-grade cobalt sulfate for the electric
vehicle industry (approximately 5,000 tonnes of contained
cobalt).
The Company is contemplating initially recommissioning the
refinery in partnership with Glencore in Q4 2020 and then expanding
production as early as the second half of 2021.
Market Conditions
In light of recent market developments, the Company is closely
monitoring conditions and their potential impact on the economy.
First Cobalt has a strong business plan and an experienced team
that continues to execute on corporate objectives. First Cobalt is
well capitalized with sufficient cash-on-hand to cover general
operations for the next 12 months as well as additional dedicated
funds to advance work at the refinery in Ontario. In the interim, management expects to
conclude a debt arrangement to fund a restart of the refinery,
which would be repaid with cash flow from the production of cobalt
sulfate.
Management remains confident in the Company's future given the
long term prospects of the EV market. First Cobalt looks forward to
playing a critical, strategic role as this market grows in
Europe and North America.
About First Cobalt
First Cobalt owns North
America's only permitted cobalt refinery. Cobalt refining is
a critical component in 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
a cobalt project in the United
States and controls significant mineral 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 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 timeframes 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.