CEO Trent Mell said that the current environment has not changed the company’s business plans or long-term outlook.
Following news that it has produced battery-grade cobalt sulfate using a different feed source at its refinery in Ontario, Canada’s First Cobalt (TSXV:FCC,OTCQX:FTSSF) said its expansion feasibility study will be delayed one month due in part to the coronavirus outbreak.
The report is in its final stages, and is now expected to be completed at the end of April, as work slowdowns impact inflow and review of vendor quotations. The study will look at an expansion scenario with a throughput of approximately 55 tonnes per day.
“Economic uncertainty due to COVID-19 is not expected to have a lasting impact on the company’s strategic plans, as we do not intend to rely on equity markets to finance our refinery expansion,” President and CEO Trent Mell said in a release on Monday (March 30).
Once a positive definitive feasibility study for a 55 tonne per day operation is completed, Glencore is prepared to give US$40 million to recommission and expand the refinery.
First Cobalt is working to restart its refinery in the fourth quarter of this year, and would then expand production in the second half of 2021.
“The intended timeline has not changed,” Mell told the Investing News Network via email. “This could be influenced by the pandemic and how long it will take for the world to return to business as usual, but for now we haven’t changed our view that this timeline is realistic.”
First Cobalt’s refinery could produce 5,000 tonnes per annum of contained cobalt in sulfate, according to a scoping study by Ausenco.
The results released on Monday show that the refinery can produce battery-grade cobalt sulfate with different feed sources using its refinery flow sheet. Most cobalt is refined in China, but once it is back online, First Cobalt’s refinery could become North America’s only producer of refined cobalt for the electric vehicle (EV) market.
First Cobalt is also in discussions with parties interested in co-funding the restart, and has seen interest from western automakers in a source of cobalt outside of China.
Commenting on whether these negotiations have been impacted by the current coronavirus outbreak, which has seen cobalt companies around the world take preventive measures, Mell said that with some US$300 billion being invested in EVs worldwide, any impact would be of a fairly short duration.
“This refinery will be around for decades, so the current business environment does not change our business plans or long-term outlook,” he added. “The transition from internal combustion engines to EVs will continue, with cobalt a key ingredient for the batteries we need for a clean future.”
Aside from its refinery, First Cobalt is currently developing the Iron Creek cobalt asset in Idaho.
Shares of First Cobalt were trading at C$0.10 in Toronto on Monday.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: First Cobalt is a client of the Investing News Network. This article is not paid-for content.