First Cobalt (TSXV: FCC; US-OTC: FTSSF) announced that it has started pre-construction work at its permitted cobalt refinery in Ontario. The company is now working on detailed engineering and procurement of long lead time items – this includes a cobalt crystallizer and solvent extraction and filtering equipment. Pilot plant testwork is also underway to assess additional improvements to the refinery flowsheet with cobalt solvent extraction expected to start at the beginning of February for completion by Feb. 20.
With $16 million in working capital, and an additional $14 million expected from government contributions to the refinery restart (announced in December), First Cobalt is negotiating an engineering, procurement, construction and management (EPCM) contract with Ausenco.
An additional $4 million is expected upon the closing of a silver asset sale transaction with Kuya Silver (CNSX: KUAY; US-OTC: KUYAF), also 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,” Trent Mell, First Cobalt’s president and CEO, said in a news release. “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.”
In addition to assembling an owner’s team to execute the refinery re-start, discussions for the debt component of the project capital are underway. The initial capital, based on a May 2020 feasibility, is pegged at US$56 million.
The First Cobalt refinery operated between 1996 and 2015. The company estimates an 18-month commissioning period for the facility, with first cobalt production expected in the second half of 2022. According to the feasibility, the facility could generate over 5,000 tonnes of cobalt annually (as 25,000 tonnes of cobalt sulphate), which would represent approximately 5% of the global market.
Earlier this month, First Cobalt secured cobalt feed for 90% of its refinery capacity.