Electra Battery advances on cobalt refinery update

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Electra Battery Materials Corp. [ELBM-TSXV, NASDAQ] shares advanced Friday after the company reported its second quarter 2023 financial results and released an update on the commissioning of its cobalt refinery and its black mass recycling trial.

The shares jumped 4.8% or $0.05 to $1.09 on volume of 138,212 and currently trade in a 52-week range of $5.29 and $1.02.

Electra, a company previously known as First Cobalt Corp, has pledged to supply LG Energy Solution (LGES) with 19,000 tonnes of battery grade cobalt over a five-year period starting in 2025.  It said that material will be supplied from a cobalt sulfate refinery located in Temiskaming Shores, near the Sudbury, Ont., Nickel Basin.

(LGES) is a leading manufacturer of lithium-ion batteries for electric vehicles. The refinery is currently under construction and also running a plant-scale black mass recycling trial to recover high-value elements contained in expired lithium-ion batteries, including lithium, nickel, cobalt, manganese and graphite.

Electra has said it anticipates commercialization of its black mass recycling capabilities in 2024 pending completion of funding commitments.

At full capacity, Electra said its battery metals park could produce enough cobalt sulfate to supply up to 1.5 million electric vehicles per year and process 2,500 tonnes of black mass materials annually. The company is also advancing plans for a second refinery in Becancour, Que.

“Our recent efforts have been primarily focused on strengthening our balance sheet and updating our refinery project and black mass economics,’’ said Electra CEO Trent Mell. He said the company remains committed to completing the refinery project.

Despite a backdrop of challenging market conditions, Electra recently raised $21.5 million from brokered (the marketed offering) and concurrent non-brokered private placements. The marketed offering consisted of 15 million units priced at $1.10 per unit, raising $16.5 million. The balance of the offering was completed on a non-brokered private placement basis, consisting of 4.5 million units and raising $5 million. The non-brokered offering was placed with holders of the company’s senior-secured convertible notes.

Meanwhile Electra reported a net profit of $12 million or 33 cents per share in the second quarter. The operating loss in the quarter was $4.5 million, up from $3.9 million in the equivalent 2022 period. The increase in the operating loss was driven by higher compensation costs due to more staff, higher legal and professional fees, and partially offset by lower exploration costs and the company’s the Iron Creek Cobalt property in Idaho. Iron Creek is one of only two advanced primary cobalt resource projects in the U.S., and a potential future source of feed for the Ontario refinery.

Electra has signed a memorandum of understanding with the First-Nation-owned Three Fires Group to form a joint venture focused on the recycling of lithium-ion battery waste in Ontario. The joint venture plans to recycle lithium-ion batteries and supply black mass to be processed at Electra’s refinery complex using the company’s proprietary black mass processing facilities.

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