The refinery that TSX-V-listed First Cobalt plans to bring back to life in Canada with funding by global mining group Glencore, is set for first production late next year, the junior company said on Monday, announcing that it had entered into a definitive financing agreement with Glencore.

The Swiss-headquartered major will be providing First Cobalt with a $5-million loan to complete advanced engineering, metallurgical testing, field work and permitting associated with a recommissioning and expansion of the refinery, in Ontario.

A request for proposal process for the feasibility study, metallurgy and environmental work has started, with a view to get field work under way in September.

Upon completion of a positive definitive feasibility study for a 55 t/d refinery expansion in the first quarter of next year and subject to certain other terms and conditions and satisfaction of conditions precedent, Glencore would advance an additional $40-million to recommission and expand the refinery.

The project will be undertaken in phases, with the first phase assessing the suitability of the First Cobalt refinery to treat Glencore material under a long-term supply agreement to produce cobalt sulphate for the North American electric vehicle market will be tested. Phase 2 of the work plan envisions a recommissioning of the refinery at 12 t/d in late 2020 and Phase 3 is an expansion to 55 t/d in 2021 using the existing site buildings and infrastructure.

A scoping study previously estimated that if the First Cobalt Refinery operated at 55 t/d, it could produce 5 000 t/y of contained cobalt in sulphate assuming cobalt hydroxide feed grading 30% cobalt.

“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 t/d facility in 2021. Cobalt prices have increased considerably over the past few weeks and the outlook for the electric vehicle market remains exceptionally strong,” said First Cobalt president and CEO Trent Mell.

Prices for the battery metal have risen sharply since Glencore announced earlier this month it would close its Mutanda mine in the Democratic Republic of Congo.

Last month, First Cobalt signed a term sheet with Glencore outlining the framework for a non-dilutive, fully funded, phased approach to recommission the First Cobalt refinery, subject to due diligence and other conditions that have now been satisfied.