Electra Battery Materials Corporation (TSX-V:ELBM, NASDAQ:ELBM) has updated on its plans to develop a low carbon, fully-integrated battery materials park for the North American electric vehicle industry, noting that the project is on schedule to commence dry commissioning in December despite constraints in the global supply chain.
Based on trends in the market, the company said its management believes that the US$67 million capital budget could be exceeded by approximately 5-10%. It added, however, that its early decision to create an experienced owner's team has been a mitigating factor and that management believes the company is well-positioned to navigate a more complex landscape.
"Despite supply chain disruptions and inflationary price pressures caused by the lingering effects of the global pandemic and recent geopolitical developments, Electra made considerable progress in Q1, advancing the construction of our expanded cobalt refinery," CEO Trent Mell said in a statement.
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"Most notably, we received our Industrial Sewage Works permit, started construction of the solvent extraction plant, and received approval of our Closure Plan. Completion of these milestones paves the way for the commissioning of our refinery expansion in Q4 2022, consistent with our expected timelines."
"We have sustained this momentum into Q2 with our successful listing on NASDAQ, strengthening of our senior leadership team, and signing an offtake agreement for nickel and cobalt produced at our battery recycling plant starting in 2023. We anticipate building on this progress through 2022 and beyond as construction of the refinery is completed and we begin production," he concluded.
Turning to its performance in the first quarter ended March 31, 2022, the company said it held cash of $51.9 million as at the end of March but noted that the amount does not include the remaining $6.5 million of government investments expected to be received.
Total incurred costs for the refinery construction project at quarter-end were $25 million, while net income for the period was $2.3 million or $0.08 per basic share.
Additionally, drill results to the west of the Iron Creek cobalt-copper project successfully extended mineralization by 130 metres along strike and by 110 metres at depth, it said. Drill results after the end of the quarter successfully extended mineralization by an additional 180 metres to the east of the deposit as well as down dip from the eastern edge of the resource zone.
The company has signed a two-year offtake agreement for nickel and cobalt produced from recycled battery material and Electra expects to commission its recycling plant in 2023. A demonstration plant is expected to begin operation in 2022 at a cost of $3 million using existing equipment.
Electra started trading on Nasdaq Capital Market effective April 27, 2022 under the ticker symbol "ELBM".
Electra's core strategy is to produce low carbon, ethically-sourced battery materials for the North American electric vehicle supply chain. Electra is specifically focused on creating the first integrated battery materials park in North America, providing refined cobalt, nickel and recycled battery materials to North American battery precursor manufacturers.
Contact the author at jon.hopkins@proactiveinvestors.com