Name of the Project
First Cobalt refinery project.

Location
Ontario, Canada.

Project Owner/s
First Cobalt Corp.

First Cobalt and Glencore AG agreed to a partnership framework in July 2019, providing for a nondilutive, 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 envisages that First Cobalt will treat cobalt feed material supplied from Glencore’s Democratic Republic of Congo operations for an initial term of up to four-and-a-half years on a tolling basis. Glencore will provide up to 100% of the capital required to recommission and expand the facility.

Project Description
The First Cobalt refinery is a hydrometallurgical cobalt refinery with a nominal throughput of 12 t/d, producing a cobalt carbonate product along with nickel carbonate and silver precipitate. The facility incorporates two settling ponds and an autoclave pond, as well as a large warehouse building that once housed a conventional mill.

The independent feasibility study conducted on the proposed permitted cobalt refinery envisages the expansion of the existing facility to 55 t/d and adapting it to be North America’s first producer of cobalt sulphate, an essential component in the manufacturing of batteries for electric vehicles (EVs).

The proposed new layout adds two new simple engineered structures to the main complex – one for tailings belt filters and the other for crystallisation and product bagging. A new external building is also contemplated to house an expanded solvent-extraction 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.

The objective is to produce about 25 000 t/y of cobalt sulphate for the EV market.

Cobalt hydroxide feed is estimated at 18 369 t and cobalt production at 5 096 t.

In tandem with the feasibility study, First Cobalt has completed a prefeasibility- (PFS-) level assessment of an early restart of the refinery using existing permits and equipment to operate at 12 t/d. The resulting prefeasibility report was intended as a benchmark from which various restart scenarios could be assessed.

Key differences in the 12 t/d demonstration plant scenario, compared with the 55 t/d feasibility study, include the treatment of a different cobalt alloy feedstock, with higher reagent requirements that significantly increase operating costs, and continuing to use the current tailings management facility rather than the dry-stack tailings design included in the 55 t/d feasibility study.

Using the PFS as a benchmark, three scoping studies are under way to assess alternate early commissioning scenarios.

In the first scenario, the refinery throughput would be reduced below 12 t/d to reduce the capital costs of a restart while enabling the refinery to operate as a demonstration plant to qualify cobalt sulphate product according to EV manufacturer specifications.

Under a second and third scenario, the refinery would initially be restarted at 12 t/d as a demon­stration plant and would, over time, be retrofitted with a nominal 43 t/d hydroxide circuit and then either be combined into one circuit or left as two circuits capable of receiving different feedstocks. Results from the PFS and the three scoping studies will guide the company’s restart strategy.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Based on a cobalt price of $25/lb, the project has a pretax net present value, at an 8% discount rate, of $192-million and a pretax internal rate of return of 64%, with a payback period of 1.8 years.

Capital Expenditure
The project has an initial capital estimate of $56-million; however, First Cobalt is evaluating opportunities to improve economics.

Planned Start/End Date
The refinery will be commissioned in 2022.

Latest Developments
First Cobalt has secured a $45-million debt and brokered equity financing package for the construction of its refinery in Ontario.

The financing consists of an offering of $37.5-million principal amount of 6.95% senior secured convertible notes due December 1, 2026, led by Cantor Fitzgerald & Co, and an overnight-marketed public offering of common shares, led by BMO Capital Markets, for gross proceeds of C$9.5-million.

The note and equity offering will replace the debt financing process announced at the end of March, stating that the financing terms and covenants of the new financing are superior to the debt financing previously pursued.

The proceeds of the finance will be used for capital expenditure associated with the expansion and recommissioning of the refinery, including buildings, equipment, infrastructure, and other direct costs, as well as engineering and project management costs. 

Key Contracts and Suppliers
Ausenco Engineering Canada (independent fea­sibility study); Knight Piésold (geotechnical drilling) and Story Environmental (permit to take water).

Contact Details for Project Information
First Cobalt investor relations, tel+1416900 3891 or email info@firstcobalt.com.