Only Environmentally Permitted, Primary Cobalt Project in the US
This profile is part of a paid investor education campaign.*
eCobalt (TSX:ECS; OTCQX:ECSIF; FRA:ECO) is a resource company advancing its Idaho Cobalt Project (“ICP”) towards production with the aim of producing a clean cobalt concentrate, a key material in lithium-ion battery cathodes. Following years of dedicated work, eCobalt holds the only environmentally permitted, primary cobalt project in the US. Working to supply the growing global demand for cobalt, eCobalt has a mandate of being a transparent and reliable source of clean cobalt.
In the rise of clean technology, particularly through electric vehicles and energy storage innovations, cobalt has been instrumental as a key component of lithium-ion batteries of all sorts. In an environment in which nations are setting timelines for the phasing out of internal combustion engines, according to Citibank by 2020, 60 percent of lithium-ion batteries will need cobalt, and 20 percent of demand for cobalt comes from the electric vehicle market. In addition to that, technology companies like Apple are starting to engage in discussions to acquire cobalt directly from miners.
As cobalt is a common byproduct of both nickel and copper, 98 percent of the world’s supply comes from projects that focus primarily on those two resources. This means that cobalt supply is tied intrinsically to the production of copper and nickel. In addition to that, the bulk of cobalt supply stems from risk-prone jurisdictions like the Democratic Republic of Congo. Hosting a primary cobalt resource in a safe and stable jurisdiction, eCobalt’s ICP offers a unique value proposition.
The ICP sits on the Idaho Cobalt Belt near the state’s north eastern town of Salmon. Fully environmentally permitted, the project hosts a mineral measured and indicated resource of 45.7 million pounds of cobalt, 65.8 million pounds of copper and 68,000 ounces of gold. Alongside this, it also has an inferred resource of 16.7 million pounds of cobalt, 29.4 million pounds of copper and 27,000 ounces of gold.
Having released a feasibility study in 2017 for the production of cobalt sulphate heptahydrate, the company was prompted by changes in the battery production supply chain to pursue the production of clean cobalt concentrate instead. Cobalt concentrate is an upstream precursor material for battery cathode production, and the company is updating its feasibility study to reflect this change in focus. In the meantime, eCobalt is advancing pre-construction activities in preparation for underground mine development slated to commence in Q3 2018.
eCobalt is led by a team of management executives and directors that bring over 250 years of collective experience in the resource industry, including Michael Callahan, who was recently appointed as President and CEO of the company. Mr. Callahan has extensive operational experience, having established and led numerous sizeable operations in North America and internationally throughout his career.
- Only primary cobalt project with full environmental permitting in US
- Finalizing new optimized feasibility study for production of clean cobalt concentrate
- Proven and probable mineral reserves of 34.51 million pounds of cobalt, 49.75 million pounds of copper and 53,286 ounces of gold
- Conducting due diligence on potential offtake agreements
- Pre-construction activities underway with goal of commercial production in 2020
- Ram deposit only makes up for 7 percent of the Company’s 5,990 acres of land holdings, leaving lots of exploration potential
- Management team and board with over 250 years of collective experience
Flagship Property: Idaho Cobalt Project
The environmentally permitted Idaho Cobalt Project is located on the Idaho Cobalt Belt, near the north eastern Idaho town of Salmon. The property is held by eCobalt’s wholly-owned subsidiary, Formation Capital Corporation. Alongside its approved Environmental Impact Statement, the company has also received a positive Record of Decision on its Mine Plan of Operations from the US Department of Agriculture National Forest Service as well as a water discharge National Pollutant Discharge Elimination System permit from the US Environmental Protection Agency.
Initial construction on the property was launched in 2011, but market conditions led to the project being placed on Care and Maintenance in 2013. Activity on the project was re-launched in 2017. Approximately $135 million has been spent on advancing the project to date.
Most exploration on the property has been focused on the Ram deposit, an area that makes up only seven percent of the property, leaving much to be explored. In 2017, the company conducted a three-hole, 5,000-meter drill program on the property. Mineralization intercepts from this program included six feet at 0.40 percent cobalt and 0.3 percent copper; six feet of 0.44 percent cobalt and 1.6 percent copper; and six feet at 0.26 percent cobalt and 2.1 percent copper. These results were key in outlining the expansion potential for the resource and contributed to an updated 2018 resource estimate.
Mineral resource and reserve
In February 2018, eCobalt released an updated mineral resource for the project, with a 0.20 percent cut-off grade. The estimate outlined a measured and indicated resource of 45.7 million pounds of cobalt, 65.8 million pounds of copper and 68,000 ounces of gold. This is complemented by an inferred resource of 16.7 million pounds of cobalt, 29.4 million pounds of copper and 27,000 ounces of gold.
As part of the project’s 2017 feasibility study, the project also has reported proven and probable mineral reserves of 34.51 million pounds of cobalt, 49.75 million pounds of copper and 53,286 ounces of gold. The reserve model will be updated to reflect the 2018 updated resource model in the new optimized feasibility study to be completed in October 2018.
In September 2017, eCobalt published a positive feasibility study for the production of cobalt sulphate heptahydrate. The feasibility study is based on an underground mine with a target production rate of 800 tons per day. Using an average base case price of $26.65 per pound for contained cobalt in cobalt sulphate, highlights from the study included:
- Pre-tax NPV (7.5 percent) of US$176.9 million
- Pre-tax IRR of 25.1 percent
- Initial capital costs of US$186.7 million
- Life of mine of 12.5 years
- Yearly production over mine life of 2.4 million pounds of cobalt, 3.3 million pounds of copper and 3,000 ounces of gold
- Life of mine cobalt production of 31.7 million pounds
Responding to changes in battery supply chain dynamics, the company changed the focus of the project to produce clean cobalt concentrate as opposed to cobalt sulphate heptahydrate. As such eCobalt is working on producing an updated feasibility study to be released in October2018. As cobalt concentrate is more economically viable, the updated feasibility study is expected to show improved values.
Pre-construction and environmental initiatives
In anticipation of production, eCobalt has been conducting construction activities, particularly at the mine and mill site on the property. These activities are focused on getting all environmental systems in place, including installing the Water Treatment Plant, putting the lining down on the Tailings Waste Storage Facility and Water Treatment Ponds, and electrifying the pump back wells. These systems must be in place prior to commencing mine development and are expected to be completed in Q4 2018.
Once the company has released its updated feasibility study and constructed the necessary infrastructure, it will be working towards achieving commercial production of cobalt concentrate in 2020.
In the meanwhile, the company is also in the process of securing offtake agreements, and is currently conducting due diligence for project financing. The company has signed LOIs with a number of parties, and is working towards finalizing terms.
Looking towards the potential beyond the Ram deposit, eCobalt has also identified other potential targets in the Sunshine and East Sunshine. Collectively these three zones have historically seen 51,210 feet of drilling across 90 holes. The property also hosts over a dozen undrilled, prospective targets.
Michael Callahan—President, CEO and Director
Mr. Callahan is a strong and experienced executive with extensive operational and public-company management experience having held senior management roles at numerous development and production stage mining companies. He joined eCobalt in October 2018. Mr. Callahan has established and led numerous sizeable operations in North America and internationally and has been responsible for the evaluation and execution of several growth-oriented transactions throughout his career.
Establishing his career with Hecla Mining in 1989, Mr. Callahan held increasingly senior roles, including Vice President of Corporate Development and President of Hecla’s Venezuelan mining operations where he oversaw all aspects of operations, successfully managed two gold operations with a 1,000 man workforce, and transformed the La Camorra mine from an unprofitable asset into the largest gold producer in Venezuela. Mr. Callahan has also served as President of Silvermex Resources Inc., a TSX-listed silver and gold producer with projects in Mexico acquired by First Majestic Silver Corp. in 2012, and President and CEO of Western Pacific Resources Corp., a mineral exploration and development company focused on rehabilitating and exploring the Deer Trail Mine in Utah.
Floyd D. Varley, BSc, MEng—COO
Floyd D. Varley has over 35 years of experience in the mining industry, primarily in underground mine operations management and engineering in Canada and the United States with an impressive track record of accomplishments. Most recently, as VP Operations for TMAC Resources, he led the development of the Hope Bay narrow vein underground gold mine and mill project from Pre-Feasibility Study through financing and construction to commercial production in the high arctic. He also managed, as Vice President, Operations and Mine General Manager, the startup of Yukon Zinc’s remote poly-metallic underground mining operation in Canada’s Yukon Territory. He was General Manager of Morton Salt’s Fairport Ohio underground mine and mill and Chief Engineer of Morton’s Weeks Island Louisiana mine and mill. In addition to his mine operations experience, as Branch Chief of the National Institute for Occupational Safety and Health, Office of Mine Safety & Health Research, he led diverse technical teams in risk management, ventilation, ground control and fire prevention research assisting metal and coal mines in the United States. He began his career as an underground miner and advanced to operations management in poly-metallic, copper, uranium, salt and coal mines. He holds a B.Sc. degree in Mining Engineering from the Colorado School of Mines.
Marc Tran, CPA, CGA, BComm, BA—CFO
Prior to being appointed to CFO in January of 2014, Marc Tran was the Controller for the Company since October 2011. He has over 12 years of experience in corporate finance, financial management, and regulatory compliance with public companies. He has previously served as Director and CFO for other public companies with projects in mineral exploration, development, and production in Canada, US, Mexico, Central and South America.
E.R. (Rick) Honsinger, BSc, PGeo.—Senior Vice President
Rick Honsinger’s geological and technical background brings over 30 years of project management, exploration and Q.P. related experience to the Company. He is Senior Vice President overseeing Technical and Business Development, Communications and related compliance and has managed and contributed to the success of numerous field and special projects during his past 20 years with eCobalt Solutions Inc.
Fiona Grant Leydier—VP Investor Relations
Fiona Grant Leydier has over 13 years of experience leading multi-faceted stakeholder communications for international publicly traded companies across diversified industries. With a primary focus on the natural resource sector, she has led investor relations for numerous companies listed on the TSX and TSX-V in Canada and advised FTSE 100 and 250 clients in the United Kingdom in the areas of corporate and stakeholder communications. She has extensive experience in the areas of investor relations, public relations, corporate communications, marketing, brand management, corporate finance and governance.
Board of Directors
Scott Hean, ICD.D—Chairman
Appointed to the Board in March 2014 and to Chair in June 2017, Scott Hean has over 35 years of experience in junior mining exploration finance, international banking and international finance. He retired in December 2015 as CFO of Quaterra Resources after 9 years of service. He served for 10 years as a board member of Sabina Gold and Silver (SBB on TSX) where he was Chair of the Compensation Committee as well as a member of the Audit Committee. SBB has a burgeoning gold and silver property in Nunavut, Canada. He has also been a Board member on numerous early stage mining explorations companies traded on the TSX-V. He served as Senior Vice President and Managing Director with Bank of Montreal, responsible for natural resources sector financings in North America. Previously, he served with J.P. Morgan of New York, primarily financing junior exploration and producing oil and gas companies. He has a B. A. from Simon Fraser University in Vancouver, British Columbia, a Master of Business Administration from the Ivey School of Business, London, Ontario and an accreditation as an ICD.D, the Institute of Corporate Directors, Director from the Rotman School of Business, University of Toronto.
David Christie, PGeo—Director
David Christie has more than 30 years of experience in the resource sector. He is currently President, CEO and Director of Orford Mining Corp (ORM-V) and he is also Vice President with Goodman & Company, Investment Counsel Inc. and Dundee Resources Limited, wholly owned subsidiaries of Dundee Corporation. Previously he was also President, CEO and Director of Eagle Hill Exploration Corporation which was acquired by Osisko Mining Corporation. He is a Director of Osisko Mining Corporation(OSK-T) and Condor Precious Metals Inc (private). Prior to joining Goodman and Company in 2011, he was a highly ranked gold and precious minerals equity research analyst at two bank-owned dealers for 12 years. He also has extensive experience in the North American mining industry working as a professional geologist exploring for gold, base metals, uranium and platinum group metals. He is a member of the PDAC convention planning committee. He received a Bachelor of Science in Geology from McMaster University in 1986, is a Professional Geoscientist with APGO and NAPEG, and a fellow of the Geological Association of Canada.
Gregory Hahn, CPG, BA, MS—Director
Appointed to the Board in May 2013, Gregory Hahn has over 35 years of mining industry experience and is currently the Interim CEO, President and COO of Canamex Resources Corp. He has served on the board of numerous companies including Marathon PGM Corp. and Metalline Mining where he was Director and Interim President & CEO. He was also former District and Senior Geologist and Chief Mine Geologist with Noranda (now Xstrata) on the Blackbird Project, located adjacent to the Company’s 100-percent owned ICP.
Robert Metka, BSc, Eng, MBA—Director
Robert Metka has over 23 years of mineral production and engineering experience as V.P. of Projects for Noranda Minerals and V.P. and General Manager of CEZinc. He is presently a Principal of Hatch, the world’s largest international mining engineering company.
David Smith, MSc, PEng, CDir—Director
David Smith is the Senior Vice-President, Finance and Chief Financial Officer of Agnico Eagle Mines Limited and has held this position since 2012. Previously he held the position of Senior Vice-President, Strategic Planning and Investor Relations. Prior to joining Agnico’s investor relations team in 2005, he was a mining analyst and also held a variety of mining engineering positions, in both Canada and abroad. He is a Chartered Director, a former member of the Board of Directors of the Denver Gold Group and an alternate Director of the World Gold Council. He has a B.Sc. and M.Sc. in Mining Engineering from Queen’s University in Kingston and the University of Arizona, respectively. He is also a Professional Engineer.
A lawyer with expertise in corporate governance, Monique Rabideau is currently the Practice Lead, Capital Markets and Securities for Practical Law Canada at Thomson Reuters, the world’s leading source of news and information for professional markets. Over the course of her 27 year career, she has advised many companies, including mineral exploration, development and producing mining companies in the areas of compliance and regulatory matters, corporate governance, mergers, acquisitions and dispositions, borrowing, lending, and issuances of securities. She is also currently the Chair of the Board for the Dancer Transition Resource Centre, the national charity that has been helping dancers across Canada make necessary transitions into, within, and from professional performing careers.
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