RE:News out.joegar wrote:
Deal signed with Glencore.
Glencore and First Cobalt Sign Definitive Agreement
Canada NewsWire
TORONTO, Aug. 26, 2019
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
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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
https://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 km(2), 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