Mell is in China looking for partners: First Cobalt produces battery grade sulfate
The majority of refined cobalt used in the electric vehicle market is produced in Asia, but First Cobalt (TSXV: FCC; US-OTC FTSSF) intends to start refining the metal into battery grade cobalt sulfate at its refinery in Ontario, after positive test results at SGS’s lab in Lakefield that replicated the refinery’s circuits and flowsheet.
The product, refined in a single batch in the lab, assayed 20.8% cobalt, surpassing the reference grade for sulfate pricing and paving the way for First Cobalt to bring its refinery out of care and maintenance and into production.
Once in production, the refinery would be the only producer of refined cobalt in North America. Cobalt sulfate is a critical component of lithium-ion batteries.
“Having demonstrated this works and produced a high purity, high-grade product, we’re now in a position to fast-track it,” the company’s president and CEO, Trent Mell, says in an interview, before leaving on a trip to China to speak with potential partners.
“We’ve been a North America-centric company, but there is a lot of interest in this asset from the Chinese, and we’ll look at any and all partnerships with the goal of supplying the cobalt to North America,” Mell says. “We’re getting a lot of inbound calls from a lot of significant players, and that shows we have value.”
First Cobalt also stands to benefit from the U.S.-China trade war and the tariff Washington has placed on imports of refined cobalt from China, Mell says. “If you can ship your product direct to Canada and not China, you’re avoiding a 10% tariff in the U.S.,” he says. “We’re exempt from those tariffs, and it makes for a cheaper supply for one of the most expensive components in your battery.”
The company has signed non-disclosure agreements with a number of cobalt miners and cobalt companies already, Mell notes, and says the next steps are to finalize deals with feedstock providers and battery or EV companies so that it can design flowsheets to particular concentrate specifications.
“We need to find a partner on either side, and then further refine our approach, our costing and our engineering, so we can produce the purest form of sulfate possible,” he says.
Results from three independent studies estimate it would cost the company roughly US$26 million to restart the hydrometallurgical cobalt-silver-nickel refinery at a 24-tonne-per-day feed rate.
The studies also estimate it would take 18-24 months to renew and amend all the refinery’s necessary permits.
The facility, commissioned in 1996, is 5 km east of Cobalt, and about a two-hour drive from Canada’s border with the U.S.
News of the successful lab tests on April 3 drove the company’s shares up 38%, or 6¢ per share, to close at 21.5¢ on a trading volume of 9.5 million shares.
The company has 348 million common shares for a $75-million market capitalization.
“This news brings us closer to cash flow,” Mell says. “There is no other facility like it in North America, and I was delighted by the market recognition we got.”
“When we started the company two years ago we were one of over a hundred cobalt companies,” he continues. “There’s only about half a dozen liquid cobalt names left, so we’re coming off that bottom … and with downstream processing to cash flow with a hard asset we own 100% of — it allows it us to stand out from our peers.”
Source: northernminer.com