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First Cobalt, Glencore and CIBC continue to strategize around refinery reopening

Jul 23, 2020

First Cobalt Corp. has provided an update on the recommissioning and expansion of its refinery in Cobalt and expects another update in August.


  • Intention to move directly to an expansion scenario and conduct pilot plant work at third party facilities, saving millions of dollars and generating stronger returns for shareholders 
  • Optimization studies for the Refinery Project are advancing, with significant opportunities identified to lower operating costs 
  • Financing discussions are entering phase two, with proposals under review with First Cobalt financial advisor CIBC

Trent Mell, First Cobalt President & CEO, commented:

As we execute our business plan, we have concluded that the optimal development scenario is to conduct additional product and process flow sheet testing at third party facilities. I am pleased by this outcome as an on-site demonstration plant would have resulted in higher capital costs, a longer development timeline and limited benefits to the project. Meanwhile, the engineering optimization work has identified opportunities to reduce the operating costs of the refinery and the financing talks are progressing. We have received several third party financing proposals and we will now seek to narrow the field in order to commence three-way discussions with our strategic partner.

On May 4, First Cobalt released a detailed engineering study for an expansion of its permitted cobalt refinery from a 12 tonnes per day (tpd) operation to a 55 tpd facility, transforming the facility into a globally competitive refiner of cobalt for the North American and European electric vehicle (EV) markets. Since that time, the Company has been conducting engineering optimization studies and advancing financing and permitting activities. The expanded refinery would represent up to 5% of global demand for refined cobalt.

The Company also completed an assessment of a restart of the Refinery using existing permits and equipment to operate a demonstration plant using the current 12 tpd configuration. The study assessed whether First Cobalt could leverage existing permits, infrastructure and equipment to produce sample cobalt sulfate material in advance of the major expansion. In consultation with Glencore and prospective EV partners, the Company concluded that the optimal economic decision is to conduct pilot plant testing at third party sites and focus construction efforts on the 55 tpd expansion.

Proceeding with an on-site demonstration plant would have resulted in several million dollars of additional investment that would not have been credited toward the 55 tpd expansion, currently estimated at US$56 million. Moreover, EV manufacturers expressed no preference for an on-site demonstration plant, as final product qualification will be conducted from material produced at the expanded refinery. Management is pleased with this outcome as it will reduce costs and complexities and allow the project team to focus its efforts on building a globally competitive facility that will be the only North American refiner of cobalt sulfate.

A key focus of the optimization work has been to assess alternative approaches to managing sodium. Process water from the Refinery will be treated to a level that meets or exceeds regulatory requirements before being returned to the environment. However, owing to the use of sodium hydroxide in the process flowsheet that has been designed, effluent from the refining process would have an elevated concentration of sodium. The engineering study contemplated installing an established technological solution of evaporation and crystallization to remove sodium content but the cost of this solution represents approximately 30% of the refinery operating cost of US$2.72/lb of cobalt produced. The Company is in discussion with various vendors and is making progress on alternatives that will achieve the same environmental standards at a significantly lower cost. Results of this work are anticipated in August.

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