eCobalt Solutions Inc. (TSX:ECS) is providing its shareholders an update on its wholly owned Idaho Cobalt Project (the "ICP"), the only near term, environmentally permitted, primary cobalt project located in the United States.
Over the last several months, significant progress has been made on the ICP as the Company moves closer to completing a NI 43-101 compliant Feasibility Study (the "Feasibility Study"). The ICP is comprised of the Mine and Mill located in Salmon, Idaho and the Cobalt Production Facility (the "CPF") located on a rail head in southern Idaho. Based on the January 5, 2017 revised Preliminary Economic Assessment report, the CAPEX required to develop the project is US$147 million, resulting in an post-tax NPV of US$113 million(discounted at 8.5%) and a post-tax IRR of 24%, using base case price of $19.50 per pound cobalt sulfate.
Recently, the price of cobalt metal reached a six year high to over US$22.00 per pound (LME - 99.3% cobalt metal). This signifies a strong near and long term demand for cobalt driven primarily by the lithium ion battery market. These positive market developments are timely as the Company moves the ICP into development and production to supply cobalt sulfate to the rechargeable battery market. Cobalt sulfate is a precursor material used in the cathode of NCA (nickel cobalt aluminum) and NMC (nickel manganese cobalt) batteries. These new generation lithium ion batteries are forecasted to have the highest long term growth due to their superior energy density, life cycle and safety performance.
eCobalt reports that a number of key milestones have been achieved for the Mine and Mill, most notably:
A number of key milestones have also been achieved for the CPF, most notably:
Feasibility Study engineers have reported that there are no further foreseeable challenges for the engineering efforts at this time.
A marketing study commissioned with CRU Group was completed to provide third party market analysis required for the Feasibility Study and to support project financing decisions. An important mandate for this study was to determine how the ICP's cobalt sulfate grade compares with other global producers. Cobalt sulfate used as battery grade materials are required to be high purity with the lowest levels of a wide range of elements including alkali metals, heavy metals, and elements that form acids such as sulfur, chlorine and phosphorus. It was determined that specifications of the cobalt sulfate produced from ICP ore qualify for the latest generation of NMC and NCA batteries. These specifications were produced from the metallurgical test program that was completed by the Company in March 2016 (March 3, 2016 news release). These results validate the Company's progress to date and further facilitate potential offtake partnerships. The results of the full marketing study will be included in the final Feasibility Study.
The Company recently closed a C$17.25 million bought deal led by Canaccord Genuity Corp. The proceeds from the financing will be used to advance the ICP. In the near term, the Company will be expanding its technical team, aggressively pursuing project financing options, beginning groundwork on the CPF site and undertake other opportunities to increase value for our shareholders.
"Additional interest in the project from potential offtake clients and senior debt lenders have been increasing as the Feasibility Study progresses towards completion," commented Paul Farquharson, President & CEO of eCobalt. He continued, "The strong forecasted near and long term demand for cobalt is driven primarily by the rechargeable battery and EV markets - this demand was not there in the past. In addition, the majority of cobalt is being mined in the Democratic Republic of Congo as a by-product of copper mining operations, and from nickel mining operations elsewhere. The ICP a very unique project for manufacturers who are seeking a fully integrated cobalt sulfate product produced safely and responsibly in an environmentally conscious manner in the United States."
eCobalt Solutions | http://www.ecobalt.com