Strong project economics and growing EV market
support development of
North America's first
battery-grade cobalt producer
TORONTO, May 4, 2020 /CNW/ - First Cobalt Corp.
(TSX-V: FCC; OTCQX: FTSSF) today announced positive results from an
independent feasibility study conducted on its permitted cobalt
refinery in Ontario, Canada. The
study contemplates expanding the existing facility and adapting it
to be North America's first
producer of cobalt sulfate, an essential component in the
manufacturing of batteries for electric vehicles.
The feasibility study demonstrates that the First Cobalt
Refinery project can become a viable, globally competitive player
in the North American and European electric vehicle (EV) supply
chain. The study reinforces the strength of First Cobalt's business
strategy for a rapidly evolving EV market that is heavily dependent
on supply from China.
FEASIBILITY STUDY HIGHLIGHTS
- Annual production of 25,000 tonnes of battery grade cobalt
sulfate from third party feed, representing 5% of the total global
refined cobalt market and 100% of North American cobalt sulfate
supply
- Initial capital estimate of $56
million and an operating cost estimate of $2.72/lb of cobalt produced, which is competitive
with global markets
- $37 million in undiscounted
pre‐tax free cashflow to the Project forecasted during the first
full year of production
- $139 million after-tax net
present value (NPV) using an 8% discount and 53% after-tax internal
rate of return (IRR), representing a payback period of only 1.8
years
- Discussions underway with Glencore on commercial arrangements,
financing and allocation of project economics; third party and
government funding opportunities also under review
- Several EV manufacturers have expressed an interest in
purchasing a North American cobalt sulfate
- Several opportunities will be evaluated over the coming months
that could enhance project economics further, including alternative
approaches to managing elevated sodium concentrations prior to
returning process water to the environment
- Prefeasibility-level study also completed on an early ramp-up
scenario using existing permits and equipment to conduct trial runs
processing a different type of feedstock
All amounts in this news release are in US dollars unless
otherwise indicated. Project economics are assessed over an initial
11-year period, however, the design capacity of a phase 1 dry-stack
tailings area is 17 years. The feasibility study is not based on
any existing mineral reserves or resources of the Company and does
not contemplate that any of the Company's current mineral projects
will provide a source of feedstock for the refinery. A webcast
and conference call will take place today, May 4 at 10:30 am
EDT. Details are at the bottom of this news
release.
Table 1 –
Feasibility Study Summary
|
Key
Assumptions
|
Cobalt Price
|
$25/lb
|
Cobalt Hydroxide Payability
|
70%
|
Cobalt Sulfate, Minimum Grade
|
20.5%
|
Foreign Exchange (CAD:US)
|
1.375
|
Tailings Capacity, Phase 1
|
17
years1
|
Capital
Requirements
|
Initial Capital Requirements
|
$56
million
|
Total Sustaining Capital
|
$0.6
million
|
Operating
Costs
|
Cobalt Production
|
$1.87/lb
Co2
|
Sodium Treatment
|
$0.85/lb
Co
|
Total Unit Operating
Costs
|
$2.72/lb
Co
|
Annual Production
Summary
|
Cobalt Hydroxide
Feed
|
18,369
tonnes
|
Feed Grade
|
30% Co
|
Annual Cobalt
Production
|
5,096
tonnes
|
Annual Cobalt Sulfate
Production
|
24,857
tonnes
|
Project
Economics
|
NPV – Pre-Tax (8% Discount
Rate)
|
$192 million (C$263
million)
|
NPV – After-Tax (8% Discount
Rate)
|
$139 million (C$191
million)
|
IRR – Pre-Tax
|
64%
|
IRR – After-Tax
|
53%
|
Cash Flow –
Pre-Tax
|
$350 million (C$482
million)
|
Cash Flow –
After-Tax
|
$259 million (C$356
million)
|
Post-Tax NPV (8%)/Initial
Capital
|
2.5
|
Payback Period
|
1.8 years
|
1 Project economics calculated for
the initial 11 years only. In aggregate, phases 1 and 2 of the dry
stack tailings areas are expected to accommodate 34 years of
production.
|
2 Does not include the
purchase of cobalt hydroxide feed; however, project economics
reflect a 70% long term payability assumption on feed and
transportation costs
|
Trent Mell, First Cobalt
President & CEO, commented: "This is an important milestone
in our efforts to disrupt the existing cobalt supply chain. The
study shows strong asset-level economics that position the refinery
to be competitive globally and provide attractive investment
returns. The outlook for electric vehicles and the push by
automakers to develop shorter supply chains creates an excellent
opportunity. With most of the world's cobalt refining capacity
located in China, there is strong
demand for a North American alternative. Our focus will now turn to
working with Glencore, our strategic partner, on implementing a
new, ethical and transparent supply chain."
Nico Paraskevas, Glencore's head
of copper and cobalt marketing added: "I would like to
congratulate the First Cobalt team on a positive feasibility study.
As the world transitions to a low-carbon economy, cobalt will play
an essential role in the growth of mobility electrification. We
look forward to working with First Cobalt to bring a sustainable
source of cobalt to the North American market."
Project Overview
The First Cobalt Refinery is a hydrometallurgical cobalt
refinery located north of Toronto,
Canada (Appendix 1). The facility was permitted in 1996 with
a nominal throughput of 12 tonnes per day (tpd) and operated
intermittently until 2015, producing a cobalt carbonate product
along with nickel carbonate and silver precipitate. The facility is
located on 120 acres, with two settling ponds and an autoclave
pond. The current footprint also includes a large warehouse
building that once housed a conventional mill.
Testing of third-party cobalt hydroxide in 2019 using the
Refinery flow sheet confirmed suitability of cobalt hydroxide as a
source of feed to produce a high purity, battery grade cobalt
sulfate.
In July 2019, First Cobalt and Glencore AG agreed to a
partnership framework providing for a non-dilutive, fully funded,
phased approach to recommission the Refinery. Subject to certain
conditions, including the completion of a positive feasibility
study and agreement upon commercial terms, the framework agreement
contemplates that First Cobalt will treat cobalt feed material
supplied from Glencore's DRC operations for an initial term of up
to 4½ years on a tolling basis, with Glencore providing up to 100%
of the capital required to recommission and expand the facility.
The objective is to produce approximately 25,000 tonnes of cobalt
sulfate per annum for the electric vehicle market.
Ausenco Engineering Canada Inc. completed two studies in support
of this strategic partnership: (1) a prefeasibility study on an
interim recommissioning of the Refinery by late 2020 or early 2021
using exiting permits and equipment to qualify a cobalt sulfate
product with end-users, and (2) a feasibility study on an expansion
scenario to 55 tpd nameplate capacity, targeted for commissioning
in Q4 2021. Details of the interim commissioning of a test plant
are described further below under Demonstration Plant Scenario. The
strategic objective of the partners is to achieve 5,000 tonnes per
annum of cobalt production (55 tpd nameplate, 50 tpd average),
which would account for approximately 5% of the current global
refined cobalt market and an even larger share of the cobalt
sulfate chemical market.
In conjunction with the feasibility study, discussions have been
ongoing with potential automotive offtake partners as well as
several lenders interested in providing a portion of the capital
cost along with Glencore.
The feasibility study assessed the project economics of the
Refinery on a stand-alone basis, assuming a 70% payability factor
on the cobalt content of a cobalt hydroxide feed source based on
expert forecasts for future payability levels (today's spot
payability is 62-65%). In order to secure the capital required and
a reliable feed source, First Cobalt and Glencore will use the
results of this study to negotiate terms of a two- to five-year
tolling agreement and financing arrangement. As such, the cash flow
generated from the Refinery will be shared between the parties and
remains subject to ongoing discussions.
Cobalt Market
According to a report commissioned from Benchmark Mineral
Intelligence, there are currently no plans to commission new cobalt
refineries outside of China other
than First Cobalt. They also note that most automotive companies
outside of China are interested in
sourcing cobalt sulfate closer to their manufacturing facilities or
from suppliers located outside of China.
Other key findings in the Benchmark Mineral Intelligence report
are as follows:
- China now accounts for
approximately 79% of the world's refined cobalt sulfate production
and this is projected to increase further
- Cobalt demand from
nickel-cobalt-manganese (NCM) batteries used in EVs will increase
from approximately 20,000 tonnes in 2019 to over 730,000 tonnes in
2040
- Average payability over the last two years for cobalt hydroxide
feed material has been at 68% of the average of the low of the
monthly Metal Bulletin Low Grade Cobalt price
- Long term cobalt price forecast is approximately $59,100 per tonne or $26.81 per pound
Benchmark notes that demand for cobalt in lithium ion batteries
will dominate all other demand categories and forecasts a
structural deficit within the next five years.
Refinery Design Details
The First Cobalt Refinery sits on a 40-acre land package and
includes the refinery building complex, one tailings pond (the
Autoclave Pond) and two water treatment ponds (the "Upper" and
"Lower" ponds). The main refinery gallery in the building complex
houses the pressure oxidation circuit, solvent extraction circuit
(SX), product filtration and a control room. The main building also
includes a laboratory, administrative offices and changerooms.
Other structures attached to the main gallery include a warehouse
which previously housed a conventional milling circuit, a
Merrill-Crowe building, a mechanical shop and a High-Density Sludge
(HDS) building. There is also an external tank farm located along
the north side of the complex. The feasibility study criteria were
to make the best use of existing infrastructure while keeping as
much as possible within the current footprint.
The proposed new layout adds two new simple engineered
structures to the main complex; one for tailings belt filters and
the other for crystallization and product bagging. A new external
building is also contemplated to house an expanded SX circuit and
sodium management infrastructure. Other changes to the site layout
include additional tankage for reagent storage in the tank farm
area and improvements to the ring-road around the refinery to
accommodate transport trucks (Appendix 2).
An 80-acre property located to the north is owned by First
Cobalt and it will be the location of a new dry stacked tailings
management facility. Tailings from the process are a gypsum that
can be readily dewatered and stacked for permanent dry storage.
First Cobalt has the advantage
that the field to the north is underlain by more than 6 metres of
clay, some of which will be excavated to increase storage capacity,
with the excavated clay being reused to construct the new tailings
storage facility and permanently rehabilitate the Autoclave pond
and the new tailings facility at end of Project. Only half of the
field to the north is planned for the new tailings management
facility, which will have approximately 17 years of storage
capacity. The other half of the field remains available to be
developed as additional storage for an additional 17 years of
operation. The existing Upper Pond will be expanded to collect
surface water from freshet and summer storm events for safe return
to the environment.
Retrofitting of the existing buildings and equipment, new
construction and installation of new equipment is expected to take
approximately 12 months.
Cobalt hydroxide feed is
expected to arrive at the Port of Montreal via ocean freight where it will be
transferred onto rail cars to be delivered to a siding on the
Ontario Northland railway in Cobalt,
Ontario. The Ontario Northland rail line passes 2 km west of
the Refinery Road. Hydroxide feed will be trucked from the rail
siding to the Refinery and refined cobalt sulfate product will be
backhauled to the siding for reloading onto rail cars for shipment
to end markets.
Process and Metallurgy
Cobalt hydroxide feed material
will arrive in bulk bags and be unloaded into the Refinery
warehouse. The bulk bags will be lifted with the Refinery's
overhead crane, where the bags will be emptied into a re-pulping
system. The slurry is then pumped to a leach circuit where it is
leached with sulphuric acid under atmospheric conditions.
Slurry exiting the leach tanks is pumped to the neutralization
circuit where limestone is added in order to raise the pH and
precipitate impurities such as iron. To minimize downstream
scaling, the slurry is cooled to 30-35°C in a cooling tower which
reduces soluble gypsum content. The precipitated solids are removed
through thickening and filtration.
Prior to solvent extraction (SX), the solution is re-heated to
raise gypsum solubility and prevent subsequent precipitation in the
mixer settlers. The first SX circuit is Impurity SX (ISX),
targeting the removal of impurities such as manganese, copper,
zinc, calcium, and iron. The extraction raffinate after this step
primarily contains cobalt, with nickel and magnesium present as
impurities. The strip liquor reports to effluent treatment, where
the impurities are precipitated and removed from solution prior to
discharge.
The second SX circuit is Cobalt SX (CoSX) which loads cobalt
onto the organic solvent while any residual impurities remain in
the aqueous phase. The cobalt-loaded organic then proceeds to the
scrubbing mixer-settlers where the pH is adjusted to remove
impurities such as magnesium and nickel that were loaded in the
extraction stage. The scrubbed organic goes to a final stripping
stage where the pH is lowered to bring the cobalt out of the
organic phase and into the aqueous strip liquor stream. Once
filtered to remove entrained organic, the strip liquor enters the
crystallization step.
The filtered strip liquor is pumped to a mechanical vapor
re-compression forced circulation crystallizer. The crystallizer
functions by evaporating water using steam in a heat exchanger,
supersaturating the cobalt-rich strip liquor and causing
crystallization to occur. The bleed stream of cobalt sulphate
crystals reports to a thickener and centrifuge for dewatering.
Together they separate the solid and liquid components of the
slurry, producing a dewatered product at <3% free moisture. The
centrifuged crystals then report to a fluid bed dryer to reduce the
moisture content of the crystals to below 0.2% w/w. Once dried, the
final product is bagged and is ready for onward shipment to the end
customer.
Tailings Storage Facility
Knight Piésold Ltd. completed geotechnical drilling on the
potential dry stack tailings area in First Cobalt's 80-acre clay
field to the north of the Refinery complex to support
feasibility-level design work. Dry stack or filtered tailings have
several benefits, including a smaller environmental footprint and
lower water treatment requirements.
The current design contemplated using approximately half of the
field, providing capacity for 17 years of production at 50 tpd (55
tpd nameplate). Thereafter, it is envisioned that the other half of
the field could be used for an additional 17 years of dry tailings
storage. It is believed that additional land would be readily
available for future expansions. For the purpose of assessing
project economics, Ausenco has assumed an 11-year project life.
Water Management
Process water from the Refinery will be treated to a level that
meets or exceeds regulatory requirements before being returned to
the environment. Environmental testing and design by First Cobalt's
consultants have devised a treatment process to ensure that the
return of process water to the environment is done in a compliant
and environmentally friendly manner. Broadly speaking, there are
two main criteria that must be met before water can be discharged.
First, metals and other elements as prescribed cannot exceed
predetermined thresholds. Second, the water being discharged should
not be acutely toxic to aquatic life.
Owing to the use of sodium hydroxide in the process flowsheet
that has been designed, effluent from the refining process would
have an elevated concentration of sodium. There are no federal or
provincial discharge limits nor surface water quality objectives or
guidelines for sodium. However, it was determined that the amount
of sodium in the effluent could be toxic to aquatic life. In
order to satisfy the requirements of a feasibility level study, the
study contemplates installing an established technological solution
of evaporation and crystallization to remove sodium content.
The evaporation and crystallization technology is proven to be
effective for removing sodium from the effluent but it is more
expensive than other alternatives. In this process, the effluent
stream is first concentrated by evaporation to reduce the volume
reporting to the crystallizer. The resulting brine is then fed to a
sodium crystallizer in which a crystalline sodium sulfate product
is formed. This crystalline product is sent for offsite
disposal.
First Cobalt identified a
number of other solutions for managing the sodium that could
significantly reduce capital and operating costs, including
substituting sodium-based reagents for alternatives not containing
sodium, making process changes or implementing other management
solutions to reduce the sodium concentration in the effluent. Due
to time constraints, Ausenco recommended that the study incorporate
a well-established treatment process and that alternatives be more
fully assessed over the next few months.
The capital cost for the selected method is $9.4 million representing almost 17% of the total
capital cost. The operating cost associated with the selected
method is $0.85/lb Co produced
representing 31% of the total operating cost. First Cobalt and its consultants believe that there
is significant opportunity in other sodium management methods that
were reviewed but not in sufficient detail to be incorporated into
this feasibility study.
Operating Costs
Operating costs are expected to average $30.7 million per annum or $2.72 per pound of cobalt produced over the
project life. Total operating costs are expected to average
$1,673 per tonne of hydroxide
processed.
The breakdown of unit costs is summarized as follows:
Table 2 – Annual
Operating Cost
|
|
$/lb
|
$million/yr
|
Labour
|
0.23
|
2.6
|
General
Maintenance
|
0.07
|
0.8
|
Site
G&A
|
0.13
|
1.4
|
Subtotal Fixed
Costs
|
0.43
|
4.8
|
Reagents &
Operating Consumables
|
1.31
|
14.8
|
Power
|
0.12
|
1.4
|
Sodium
Management
|
0.85
|
9.61
|
Lab and
Assay
|
0.01
|
0.1
|
Subtotal Variable
Costs
|
2.29
|
25.9
|
Total
|
2.72/lb
Co
|
30.7
|
1 See Next Steps and Project
Opportunities
|
Fixed costs represent just 16% of the operating costs. The
largest variable costs are Reagents & Operating Consumables,
followed by sodium management costs (including offsite disposal).
Ausenco has recommended that the Company assess alternative
solutions to manage sodium in the effluent that, if successful,
could result in a significant drop to operating costs and the
initial capital costs (see Water Management above).
Capital Costs
The initial capital cost for the Project is $56 million and has been developed assuming an
EPCM execution strategy. The onsite pre-production period spans 12
months.
A breakdown of the capital requirements is detailed below.
Table 3 – Capital
Cost ($ millions)
|
Mechanical
Equipment
|
13.5
|
Electrical
Equipment
|
2.2
|
Piping
|
3.2
|
Architectural
|
1.3
|
Platework &
Tanks
|
5.8
|
Structural
Steelwork
|
1.6
|
Instrumentation
Equipment & Bulks
|
1.6
|
Dry-stack Tailing
Facility
|
1.2
|
Concrete
|
0.8
|
Sodium
Removal
|
9.41
|
Other
Directs
|
0.8
|
Subtotal Direct
Capital
|
41.4
|
Engineering
Procurement Construction
and Management (EPCM)
|
3.9
|
Spares & First
Fills
|
2.5
|
Field
Indirects
|
1.5
|
Other
Indirects
|
1.5
|
Subtotal Indirect
Costs
|
9.4
|
Owner's
Costs
|
1.0
|
Contingency
|
4.2
|
Total Capital
Cost
|
56.0
|
1 See Next Steps and Project
Opportunities
|
The feasibility study capital estimates are accurate to +/- 15%
and includes a $4.2 million
contingency.
Sunk costs related to previous owners' investments of
approximately $75 million are not
reflected in the total capital estimate of $56 million. Previous investments include access
roads, power lines, tailings management facility, the refinery
building, adjacent warehouse and existing equipment.
Sensitivity Analysis
The Refinery Project sensitivity analysis was performed on
cobalt price and foreign exchange, as well as changes to Capex and
Opex, as presented in the graphs below:
Figure 1 – Post-Tax NPV Sensitivity
Figure 2 – Post-Tax IRR Sensitivity
Permitting
Regarding the ability of First Cobalt to legally operate the
Refinery under the current regulatory regime in Ontario, three environmental approvals and a
closure plan amendment are required. The Air Environmental
Compliance Approval (Air ECA) and Industrial Sewage Works ECA have
been submitted, approved and amended from time-to-time by previous
owners of the Refinery and remain in good standing. The Permit to
Take Water (PTTW) is the third environmental approval and requires
renewal from time-to-time. As the Refinery has not operated since
mid-2015, the current PTTW has expired. First Cobalt and Story Environmental prepared a new
PTTW application, consulted with local Indigenous Communities and
subsequently submitted the PTTW application in March 2020. Under normal circumstances, First
Cobalt's consultants have advised that the new PTTW might be
expected within 6 months of submission.
The Refinery has a Closure Plan on file with the Ontario
Ministry of Energy, Northern Development and Mines (ENDM). In
October 2019, the Company was granted
a transfer of the Closure Plan from the previous owner to Cobalt
Camp Refinery Ltd., a wholly owned subsidiary of First Cobalt. In
conjunction with the transfer, First Cobalt also increased the
amount of Financial Assurance held as cash by ENDM.
With the exception of the PTTW which the Company expects to
receive in due course, the Refinery has all the necessary approvals
in place to restart production at its permitted feed rate of up to
12 tpd.
For the expansion scenario envisioned by this feasibility study,
the Air ECA, Industrial Sewage Works ECA and the Closure Plan will
all require amendment to reflect the new operating and
environmental regimes. Work has already begun collecting baseline
and other data in support of these ECA amendments. First
Cobalt currently expects to be
able to make the application for these ECA amendments before the
end of 2020. Based on the feasibility work conducted to date,
no hurdles have been identified which would compromise the approval
of these applications. Indigenous Community and public consultation
will be continuing throughout the ongoing scoping studies and the
approval process.
Demonstration Plant Scenario (12 tpd Restart)
In tandem with the feasibility study, the Company completed a
prefeasibility level assessment of an early restart of the Refinery
using existing permits and equipment to operate at 12 tpd. The
resulting prefeasibility report was intended as a benchmark from
which various restart scenarios could be assessed.
Key differences in the 12 tpd demonstration plant scenario
compared to the 55 tpd feasibility study include: (1) treatment of
a different cobalt alloy feedstock with higher reagent requirements
that significantly increases operating costs, and (2) continuing to
use the current tailings management facility rather than the
dry-stack tailings design included in the 55 tpd feasibility
study.
A site field inspection program was completed in Q4 2019 to
assess the condition of existing equipment and identify the
equipment that can be refurbished, reused or repurposed. The field
inspection program concluded that the Refinery remains in good
condition for a quick restart and quantified the scope of work for
the capital cost estimate.
The scope of the study included all areas within the existing
refinery building, from feed preparation to final product bagging,
reagents, utilities, water circuits, existing laboratory and
offices, incoming power and the existing tailings management
facility. The existing processing configuration would be modified
based on receipt of a cobalt feed containing alloy and production
of cobalt sulfate through leaching, neutralization, SX, ion
exchange (IX), and crystallization unit operations. The development
of the process design criteria and flowsheet modifications were
based on recently completed metallurgical test work results and
METSIM™ modelling.
Metallurgical test work program included leach testing, partial
neutralization of pregnant leach solution, impurity SX and
scrubbing, cobalt SX and scrubbing, cobalt precipitation,
impurities precipitation and solids-liquids separation testing.
Cobalt extractions exceeded the
design value of 93% and the resulting cobalt sulfate product graded
21.4% cobalt.
The refinery would operate under the existing Air and Noise ECA,
Industrial Sewage Works ECA and Closure Plan. An application for a
new a Permit to Take Water has been submitted, as mentioned
above.
The operating and capital cost estimates were prepared in
accordance with a Class 4 (PFS) estimate with an accuracy of ±25%.
Operating cost for the cobalt alloy product was estimated at
$6.88 per pound of cobalt produced
and the capital cost was $12.1
million plus $1.3 million
contingency. The Company is now assessing how much of the capital
cost would be credited against the 55 tpd capital cost
estimate.
The prefeasibility study concludes that an early
recommissioning scenario using existing permits, facilities and
equipment is feasible, subject to a few changes to the current flow
sheet and other plant modifications. First Cobalt and Glencore are reviewing the report
to determine the optimal path for a demonstration plant that could
produce cobalt sulfate for EV battery product qualification as
early as Q4 2020.
Using the prefeasibility study as a benchmark, three scoping
studies are underway to assess alternate early commissioning
scenarios. In the first scenario, the Refinery throughput would be
reduced below 12 tpd in order to reduce the capital costs of a
restart while allowing the Refinery to operate as a demonstration
plant to qualify cobalt sulfate product according to EV
manufacturer specifications. Under a second and third scenario, the
Refinery would be initially restarted at 12-tpd as a demonstration
plant and over time would be retrofitted with a nominal 43-tpd
hydroxide circuit and then either combined into a single circuit or
left as two circuits capable of receiving different feedstocks.
Results from the prefeasibility study and the three scoping studies
will guide the Company's restart strategy.
Project Opportunities
The feasibility study outlines a path to commissioning a
globally competitive cobalt refinery to service North America and Europe. Potential remains for further
improvements in Project economics which will form the basis of
ongoing evaluation work. Some of the other opportunities that First
Cobalt will pursue include the following:
- Utilizing a different technology or approach to managing sodium
could have significant positive impacts on both capital and
operating costs. The Company plans to assess alternative options
with the goal of enhancing overall project economics.
- The crystallizer selected for the feasibility study (capex of
$4.3 million) is intended to achieve
the highest quality of cobalt sulfate 'heptahydrate'. However,
various potential offtake partners have indicated a higher
tolerance for other hydrates of cobalt sulfate, such as monohydrate
or pentahydrate, provided that cobalt content is known and moisture
is controlled. As a result, the Project might realize a significant
savings by using a different crystallizer.
- The financial model in the feasibility study assumed a cobalt
recovery of 93%, based on a batch metallurgical testing and METSIM™
modelling that yielded a 93.3% recovery. However, the Company and
its advisors believe that recoveries in excess of 95% can be
achieved through additional pilot plant testing of the SX circuit
under conditions of continuous operation where "lost" cobalt is
recycled back through the circuit and subsequently recovered. Batch
testing conducted to date does not adequately reflect this
operating scenario.
- The phase 1 dry stack tailings design has 17 years of storage
capacity whereas the financial model assumes an 11-year project
life. The Refinery can continue operating indefinitely provided
sustaining capital expenditures are made to maintain and replace
parts and equipment over time. By extending the financial model for
the entire 17 years of the phase 1 tailing design or the 34 years
for phases 1 and 2, the NPV is expected to have a material
increase.
Next Steps
The Company expects to continue to advance and de-risk the
Project in 2020 by pursuing the following activities:
- Completing the three scoping studies to help identify the best
path forward to recommission the Refinery using existing
permits
- Assess other sodium management technologies and options that
could significantly reduce capital and operating costs
- Advance discussion with Glencore discussions on commercial
terms for a toll-treatment arrangement and financing
alternatives
- Advance funding discussions with third parties and government
agencies
- Continue to work with Glencore to advance long term offtake
discussions
- Advance environmental approval activities to shorten timeline
for regulatory approvals
- Target completion of a development plan within the next 90
days
Technical Reports
Further information about the 55 tpd feasibility study,
including data verification, key assumptions, parameters, risks and
other factors referenced in this news release, will be provided in
technical reports that the Company will file on its website and on
SEDAR at www.sedar.com in the next few weeks. The 12 tpd
prefeasibility study will also be made available on SEDAR for
reference.
The feasibility study technical report will be prepared in
accordance with NI 43-101 form guidelines however the report does
not constitute a "feasibility study" within the definition employed
by the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM), as they relate to the Refinery and do not concern a "mineral
project" of the Company. As a result, National Instrument 43-101 –
Standards of Disclosure for Mineral Projects is not applicable to
the scientific and technical disclosure in this press release.
The following independent authors have reviewed and verified
that the technical information in respect to the feasibility and
prefeasibility studies in this press release is accurate and
approve the written disclosure of such information.
Ausenco Engineering Canada Inc. : Tommaso Roberto Raponi, P. Eng.
Knight Piésold Ltd. : Andy Phillips,
P.Eng
Story Environmental Inc. : Maria
Story, P.Eng.
Webcast and Conference Call
The Company will host a webcast and conference call on
Monday, May 4 at 10:30am EDT / 2:30pm
UTC to discuss the results of a definitive feasibility study
on the First Cobalt Refinery. Interested parties are welcome to
follow the presentation and participate in a question and answer
session by webcast or conference call as follows:
Webcast
Link: https://produceredition.webcasts.com/starthere.jsp?ei=1309732&tp_key=ac34f871e4
Call Dial-in:
416-764-8609 : (Direct)
1-888-390-0605 : (North
America toll free)
No conference code required
A recording of the presentation will be available for playback
for one week following the live call. Playback instructions will be
available on the Company's website.
About First Cobalt
First Cobalt owns North America's only permitted cobalt
refinery. Cobalt refining is a
critical component in the manufacturing of batteries for electric
vehicles, consumer electronics and industrial applications.
Cobalt is a critical mineral and
forms a foundational piece of the next generation of the North
American auto sector. First Cobalt
also owns an advanced cobalt project in the United States and controls significant
mineral assets in the Canadian Cobalt Camp.
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,
which relate to the proposed development of the First Cobalt
Refinery, the intended processing of cobalt hydroxide feedstock at
the First Cobalt Refinery and the ability to secure financing and
feedstock materials necessary to commence production at the First
Cobalt Refinery. 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.
Appendix 1
Location Map – First Cobalt Refinery
Appendix 2
Site Rendering – Expanded Refinery
Appendix 3
Pictures of the First Cobalt Refinery
SOURCE First Cobalt Corp.