Electra Battery Materials arranges US$3.5 million private placement

Electra Battery Materials Corp. [ELBM-TSXV, NASDAQ], a company that has a five-year deal to supply battery-grade cobalt to lithium-ion battery manufacturer LG Energy Solution (LGES), said it intends to complete a non-brokered private placement to raise up to US$3.5 million.

The company said the offering will consist of units to be issued at a price of US$1.12 per unit, each of which will consist of one common share and one transferable common share purchase warrant. Each warrant will entitle the holder to purchase one common share at a price of US$1.40 at any time for 18 months following the date of issue. Net proceeds raised from the offering will be used to advance the company’s refinery project site in Tamiskaming Shores, Ont., and for general corporate purposes.

The announcement comes after Electra Battery announced the receipt of a letter of intent for proposed funding of $20 million that could be used to support construction of the refinery. The letter of intent, which was agreed to back in January 27, 2025, was provided to the company by the Canadian Federal Government is non binding. It expresses an interest and intent to work towards completing a final term sheet but does not constitute a binding agreement.

Electra shares eased 5.5% or 10 cents to $1.70. The shares trade in a 52-week range of $3.80 snf $1.60.

Electra, a company previously known as First Cobalt Corp, has pledged to supply LGES with 3,000 tonnes cobalt contained in a cobalt sulfate product in 2025 and a further 4,000 tonnes in each of the following years through 2009, for a total of 19,000 tonnes under an agreed pricing mechanism. That material will be supplied from a cobalt sulfate refinery located in Temiskaming Shores, near the Sudbury, Ont., Nickel Basin.

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 recently said results from its plant-scale trial have met or exceeded results achieved previously in the lab setting. Electra anticipates commercialization of its black mass recycling capabilities in 2024, pending completion of funding commitments.

First Cobalt acquired the facility three years ago when it bought US Cobalt Inc. for about $150 million.

As part of the deal, First Cobalt also picked up the Iron Creek Cobalt property in Idaho, one of only two advanced primary cobalt resource projects in the U.S., and a potential future source of feed for the Ontario refinery.

After recent talks with potential customers in the auto and battery manufacturing sector, First Cobalt elected to expand the refinery into a Battery Metals Park capable of supplying a variety of materials for the electric vehicle market.

At full capacity, Electra’s battery materials park could produce enough cobalt sulfate to supply up to 15 million electric vehicles annually and process 2,500 tonnes of black mass materials per annum.