First Cobalt produces battery grade sulfate

Most refined cobalt used in the electric vehicle market is produced in Asia, but First Cobalt (TSXV: FCC; US-OTC FTSSF) intends to start refining the metal into battery-grade cobalt sulphate at its refinery in Ontario, after positive test results at SGS’s lab in Lakefield that replicated the refinery’s circuits and flowsheet.

The product, refined in a single batch in the lab, assayed 20.8% cobalt, surpassing the reference grade for sulphate pricing and paving the way for First Cobalt to bring its refinery out of care and maintenance, and into production.

Once in production, the refinery would be the only producer of refined cobalt in North America. Cobalt sulphate is a critical component of lithium-ion batteries.

“Having demonstrated this works and it produced a high-purity, high-grade product, we’re now in a position to fast track it,” the company’s president and CEO, Trent Mell, says in an interview, before leaving on a trip to China to speak with potential partners.

“We’ve been a North America-centric company, but there is a lot of interest in this asset from the Chinese, and we’ll look at any and all partnerships with the goal of supplying the cobalt to North America,” Mell says. “We’re getting a lot of inbound calls from a lot of significant players, and that shows we have value.”

First Cobalt also stands to benefit from the U.S.-China trade war and the tariff Washington has placed on imports of refined cobalt from China, Mell says. “If you can ship your product direct to Canada and not China, you’re avoiding a 10% tariff in the U.S.,” he says. “We’re exempt from those tariffs, and it makes for a cheaper supply for one of the most expensive components in your battery.”

A sample of the cobalt sulphate produced by First Cobalt. Credit: First Cobalt.

The company has signed non-disclosure agreements with cobalt miners and cobalt companies already, Mell notes, and says the next steps are to make deals with feedstock providers and battery or electric vehicle companies, so that it can design flowsheets to particular concentrate specifications.

“We need to find a partner on either side, and then further refine our approach, our costing and our engineering, so we can produce the purest form of sulphate possible,” he says.

Results from three independent studies say it would cost the company US$26 million to restart the hydrometallurgical cobalt-silver-nickel refinery at a 24-tonne-per-day feed rate.

The studies also estimate it would take 18–24 months to renew and amend all the refinery’s necessary permits.

The facility — commissioned in 1996 — is 5 km east of Cobalt, and a two-hour drive from Canada’s border with the United States.

News of the lab tests on April 3 drove the company’s shares up 38%, or 6¢ per share, to close at 21.5¢, on a trading volume of 9.5 million shares.

The company has 348 million common shares for a $75-million market capitalization.

“This news brings us closer to cash flow,” Mell says. “There is no other facility like it in North America, and I was delighted by the market recognition we got.”

“When we started the company two years ago we were one of over a hundred cobalt companies,” he continues. “There are only about half a dozen liquid cobalt names left, so we’re coming off that bottom … and with downstream processing to cash flow with a hard asset we own 100% of — it allows it us to stand out from our peers.”