Electra Reports Q2 2023 Results and Provides Update on Cobalt Refinery Project and Black Mass Recycling Trial
August 17 2023 - 5:01PM
Business Wire
Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V:
ELBM) (“Electra” or the “Company”) today reported its financial
results for the three- and six-month periods ended June 30, 2023,
and provided an update on the commissioning of its cobalt refinery
and its black mass recycling trial. All amounts are in Canadian
currency unless otherwise stated.
“Our recent efforts have been primarily focused on strengthening
our balance sheet and updating our refinery project and black mass
economics,” said Trent Mell, Electra’s CEO. “With completion of our
re-baseline engineering report, scoping study, and recent equity
financing, which raised $21.5 million in gross proceeds, now behind
us, we will accelerate our black mass recycling strategy. This will
entail building continuous operations at our refinery complex
capable of processing up to 2,500 tonnes of black mass material per
year and advancing our joint venture with Three Fires to process
lithium-ion battery scrap in a primary recycling facility in
Ontario.”
Mr. Mell added, “Over the longer term, we remain committed to
completing our cobalt sulfate refinery project in Ontario,
supplying battery grade material to LG Energy Solution and other
customers, and advancing plans for a second refinery in Bécancour,
Quebec.”
ELECTRA Q2 2023 HIGHLIGHTS AND DEVELOPMENTS
- Net income for the period was $12.0 million or $0.33 per share.
The totals were driven by a gain of $14.4 million of fair value
adjustments relating to the 2028 Notes and unrealized derivative
financial liability gain.
- Operating loss for Q2 2023 was $4.5 million, up from $3.9
million for Q2 2022. The increase was driven by higher compensation
costs due to more staff and higher legal and professional fees, and
partially offset by lower exploration costs for Iron Creek.
- Held cash and marketable securities of $7.4 million as at June
30, 2023, down from $12.9 million as at March 31, 2022. The decline
was primarily driven by capital costs related to the construction
of the cobalt refinery project and costs related to the Company’s
black mass trial. Electra’s cash balance at the end of Q2 2023 does
not include the remaining $5.1 million of government investments
expected to be received. Subsequent to quarter end, Electra
completed an equity financing, generating gross proceeds of $21.5
million.
- Progressed with the first plant-scale recycling of black mass
material in North America using Electra’s proprietary
hydrometallurgical process. Progress in Q2 was marked by high
recoveries of critical metals, including lithium, nickel, cobalt,
copper, manganese, and graphite, needed for the EV battery supply
chain, and the production of high-quality nickel-cobalt mixed
hydroxide, graphite, and lithium carbonate products.
- Released highlights of a desktop scoping study1 focused on
evaluating the economics of developing a modular process plant
initially capable of processing 2,500 tonnes of black mass material
per year. The scoping study determined that:
- The capital spend is estimated at $8.1 million ($US6
million)
- The internal rate of return is estimated at 127%.
- EBITDA is estimated to be in the range of US$9.6 to US$12.6
million per year beginning with the first full year of
operations.
- The payback period is estimated at between one and two
years.
- Released highlights of a re-baseline engineering report focused
on determining the capital spend requirements for completing
construction of a cobalt refinery complex capable of producing
5,000 tonnes of cobalt contained in sulfate per year. The updated
capital spend total reflected the impacts of inflation, supply
chain disruptions, and scope expansion since construction project
was initiated. The total capital spend for completing the refinery
project is currently estimated at $155 to $167 million of which
$81.7 million of capitalized development costs have been incurred
to date.
- Signed a memorandum of understanding with the First
Nation-owned Three Fires Group to form a joint venture focused on
the recycling of lithium-ion battery waste in Ontario. The joint
venture plans to recycle lithium-ion batteries and supply black
mass to be processed at Electra’s refinery complex using the
Company’s proprietary black mass processing capabilities that
recover high value elements, including lithium, nickel, cobalt, and
graphite, used to manufacture electric vehicle battery cells.
- Appointed Peter Park, a senior finance professional with more
than 20 years of experience, as Chief Financial Officer effective
July 4, 2023.
Highlights Subsequent to Quarter End
- Closed concurrent brokered and non-brokered private placements
for aggregate gross proceeds of $21.5 million. Under the terms of
the equity financings, the Company issued 19,545,454 units in
aggregate, at a price of $1.10 per unit with each unit consisting
of one common share and one common share purchase warrant. Each
warrant entitles the holder to purchase one common share at a price
of $1.74 at any time on or before August 11, 2025. Electra intends
to use the net proceeds of the equity financing to advance its
black mass recycling strategy, its cobalt refinery, for working
capital to retire existing payables, and general corporate
purposes.
- Extended and expanded the terms of its battery-grade cobalt
supply agreement with LG Energy Solution whereby Electra will now
supply 19,000 tonnes of contained cobalt in sulfate over a
five-year period beginning in 2025, up from 7,000 tonnes over a
three-year period when the supply agreement was first announced in
September 2022.
- Made the first customer shipment of nickel-cobalt produced at
the Company’s refinery complex north of Toronto from recycled
battery material.
For complete details of the consolidated financial statements
and the associated management’s discussion and analysis, please
refer to the Company’s filing on SEDAR (www.sedar.com) or the
Company’s website (www.ElectraBMC.com).
Electra will host a conference call on August 18, 2023 at 10:00
am ET to review its second quarter performance and discuss
near-term outlook.
Dial-in and Webcast Details:
- North American dial-in number: 1
800-319-4610 - International dial-in number: 1 416 9153239
-638-5340 - Webcast and slide presentation:
https://ElectraBMC.com/category/events/
Corporate Matters
In accordance with its long-term incentive plan, the Company has
granted 50,000 stock options, $98,151 in Restricted Share Units
(RSU) and $24,375 in Deferred Share Units to certain directors,
officers, employees, and contractors of the Company. All awards
will be granted and priced two trading days from today on the
closing price of the Company’s common shares on the TSX Venture
Exchange.
Long-term incentive grants are an important retention and
incentive tool for key employees, and a mechanism to align
interests with shareholders. RSUs and DSUs are being issued in lieu
of cash compensation otherwise payable to certain employees and
directors. DSUs may not be exercised until a director or officer
ceases to serve the Company. RSUs and DSUs will vest in one year
from the grant date and the stock options will vest in three equal
tranches on the first, second and third anniversary of the grant
date and will be for a term of five years.
About Electra Battery Materials
Electra is a processor of low-carbon, ethically-sourced battery
materials. Currently commissioning North America’s only cobalt
sulfate refinery, Electra is executing a multipronged strategy
focused on onshoring the electric vehicle supply chain. Keys to its
strategy are integrating black mass recycling and nickel sulfate
production at Electra’s refinery located north of Toronto,
advancing Iron Creek, its cobalt-copper exploration-stage project
in the Idaho Cobalt Belt, and expanding cobalt sulfate processing
into Bécancour, Quebec. For more information visit
www.ElectraBMC.com.
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”. Such forward-looking statements include, without
limitation, statements regarding the potential for additional
funding from the Federal government of Canada and the government of
Ontario and the quantum and terms thereof and acceleration of the
black-mass recycling strategy. Forward-looking statements are based
on certain assumptions, and 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. Among the bases for assumptions with
respect to the potential for additional government funding are
discussions and indications of support from government actors based
on certain milestones being achieved. 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 Electra Battery Materials
Corporation, filed on SEDAR at www.sedar.com and with on EDGAR at
www.sec.gov. Other factors that could actually results to differ
materially include changes with respect to government or investor
expectations or actions as compared to communicated intentions, and
general macroeconomic and other trends that can affect levels of
government or private investment. Although the Company 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, the Company disclaims any
intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
____________________________ 1 Electra’s desktop scoping study
was based on a number of assumptions, including annual processing
of 2,500 tonnes of black mass, metal prices using analysts’
long-term forecasts, recovery rates consistent with those achieved
to date, and $12.6 million of committed capital comprised of $8.1
million for capital costs and $4.5 million in working capital.
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version on businesswire.com: https://www.businesswire.com/news/home/20230817943255/en/
Joe Racanelli Vice President, Investor Relations
info@ElectraBMC.com 1.416.900.3891
Electra Battery Materials (NASDAQ:ELBM)
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