First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) chief executive, Trent Mell said this year is “all about execution”, as the company revealed it has begun important logistical preparation work ahead of construction at its refinery in Northern Ontario.
The company is building a project team and has also started detailed engineering and procurement for long-lead order equipment, notably the cobalt crystallizer and solvent extraction and filtering equipment.
At the same time, pilot plant test work is ongoing to assess further improvements to the refinery flowsheet. Cobalt solvent extraction is scheduled to commence at the beginning of next month and is expected to be completed by February 20.
READ: First Cobalt closes $9.7M bought-deal offering as its cobalt refinery in Ontario advances
Negotiations are also underway with the engineering and construction contractor, Ausenco Engineering Canada.
First Cobalt is currently negotiating debt financing; however, a strong treasury has allowed it to embark on the program outlined above.
It has C$16 million in working capital, made up of the proceeds from the recent financing and an early warrant exercise. The governments of Canada and Ontario are investing C$10 million, while the company is due a further C$4 million from a silver transaction announced in December.
"The commencement of pre-construction activities brings us one step closer to our vision of producing the world's most sustainable cobalt,” said CEO Mell in a statement. “Our strong treasury allows us to build a project team and commence procurement and detailed engineering while we complete a debt financing process. 2021 is all about execution."
Once complete, the facility will be the first of its kind in North America, capable of producing 25,000 tonnes of battery-grade cobalt sulfate annually, which could represent 5% of the global market for refined cobalt
First Cobalt's refinery project has an estimated capital cost of C$77 million (US$60 million), including federal and provincial contributions totaling C$10 million. This support will help secure well-paying, long-term jobs in Northern Ontario.
And the refinery will add another significant piece to the automotive supply chain in Canada, following recent announcements by both levels of government in support of battery electric vehicle production.
As global EV sales continue to set new records, First Cobalt said it will play a critical role in the growing North American supply chain and this investment reinforces Canada's position as an automotive powerhouse as the auto industry positions itself for an electric future.
Contact the author at ian.lyall@proactiveinvestors.com