Provides Update on Phase 1 of Battery
Materials Park
TORONTO, Nov. 10, 2021 /CNW/ - Electra Battery
Materials Corporation (TSXV: FCC) (OTCQX:
FTSSF) (the "Company") provided an update on the
expansion and recommissioning of its hydrometallurgical refinery in
Canada, announcing a 30% increase
in the design capacity of its cobalt refinery. First production is
scheduled for Q4 2022, as part of a phased approach to create the
only battery materials park in North
America, providing automakers with direct access to
battery-grade nickel and cobalt, recycled battery material and
precursor material.
HIGHLIGHTS
- In response to strong customer demand, Electra will invest in
additional capacity for its crystallizer circuit, which will result
in installed capacity of 6,500 tonnes of annual cobalt production,
a 30% capacity increase from the feasibility study design of 5,000
tonnes
- Commissioning of the cobalt refinery remains on schedule for Q4
2022
- Project control budget for the larger circuit is US$67 million, which can be funded from treasury,
compared to a feasibility study estimate for a smaller plant of
US$60 million
- Ground excavation has commenced for a new solvent extraction
facility and contracts have been awarded for the foundations and
building construction
- Previously announced MoU with IXM SA for cobalt hydroxide feed
material has been formalized as an executed contract
- Replay of November 8 investor
call discussing new corporate strategy and name change from First
Cobalt to Electra Battery Materials is now available on the
Company's website
Due to client feedback and a strong demand outlook for
battery-grade cobalt, Electra Battery Materials will increase its
investment in its low carbon Canadian hydrometallurgical refinery
and expand nameplate capacity of its crystallizer circuit to 6,500
tonnes of annual cobalt production. This represents a 30% capacity
increase from the design rate of 5,000 tonnes per year. The
facility will produce 100% of North American supply and 26% of
supply sourced outside of China.
Construction remains on schedule to commission the refinery in
Q4 2022 and initially ramp up to 5,000 tonnes per year. Permit
amendments will be sought for the incremental capacity to permit
the facility to ramp up from 5,000 to 6,500 tonnes.
"The strength of the North American electric vehicle market year
to date and the growth forecasts of automakers informed our
decision to invest in additional capacity even before the initial
capacity has been brought online. Likewise, our decision to pursue
a more ambitious strategy of producing precursor material, nickel
and cobalt, and to recycle batteries is motivated by insights
shared by battery cell manufacturers and automotive companies,"
said Trent Mell, President &
Chief Executive Officer.
The Company has signed contracts and purchase orders with
commitments totaling US$22 million.
Contracts have been awarded for the two most expensive components
of the refinery – the cobalt crystallizer and the solvent
extraction plant. A number of smaller contracts have also been
awarded, including solvent extraction plant earthworks, foundations
and exterior building construction.
The capital budget is currently estimated at US$67 million, including a contingency amount of
US$3.9 million. This represents a
$7 million or 11.67% increase from
the previously announced capital cost estimate of US$60 million. Part of the additional cost is
related to the decision to increase production by 30% as well as
changes in foreign exchange and increased construction material
costs compared to the original engineering study. Detailed
engineering is now significantly more advanced and numerous
contracts and equipment orders have been finalized, resulting in a
new capital budget that is more defined and representative of the
advancement of the project. With the increased project definition,
the formal project control budget has now been internally
approved.
The project capital table is provided below:
From the revised project capital budget, approximately
US$5 million has been spent to date,
primarily on equipment deposits. Cash requirement for the refinery
expansion from today through to commissioning is estimated at
US$59 million. A further US$3 million is not expected to be paid until
early 2023, based on anticipated payment terms.
The Company's current working capital on hand is approximately
US$54 million (after previously
paying for the first $5 million in
project expenditures). Additionally, the committed funding
from the Governments of Ontario
and Canada will provide a further
US$8 million (C$10 million), which gives overall liquidity of
approximately US$62 million to use
moving forward.
Given the number of items already under contract and a strong
internal controls framework, the Company believes that the
contingency amount of US$3.9 million
included in the capital budget will not be required in full, and
that a significant portion will be applied to increase the
Company's excess cash on hand.
The Company has also formalized its previously announced
long-term cobalt hydroxide feed arrangement with IXM SA, a fully
owned subsidiary of CMOC, to supply cobalt from its Tenke Fungurume
mining operation, which complements the existing cobalt hydroxide
supply agreement the Company has in place with Glencore. The
Company plans to source the remaining feed opportunistically at a
later date.
November 8 Investor Call
Replay
Electra hosted a live investor call on Monday, November 8, unveiling the Company's new
brand and shift in corporate strategy to building North America's only fully integrated,
localized and environmentally sustainable battery materials park. A
replay is now available for viewing,
here: https://www.firstcobalt.com/investors/media-gallery/videos/
About Electra Battery Materials
Electra is building North
America's only fully integrated, localized and
environmentally sustainable battery materials park. Leveraging the
company's own mining assets and business partners, the Electra
Battery Materials Park will host cobalt and nickel sulfate
production plants, a large-scale lithium-ion battery recycling
facility, and battery precursor materials production, which will
serve both North American and global customers. Electra Battery
Materials is an integral part of the North American battery supply
chain, providing low-carbon, sustainable and traceable raw
materials for the region's fast growing electric vehicle
industry.
On behalf of Electra Battery Materials.
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 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 Electra, filed on SEDAR at
www.sedar.com. Although Electra 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, Electra disclaims any intention or obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
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SOURCE Electra Battery Materials Corporation