First Cobalt Corp. [FCC-TSXV; FTSSF-OTCQB; FCC-ASX) shares rallied sharply Wednesday April 3 after the company said it has successfully produced a battery grade cobalt suflate.
The company said it achieved this result by using the First Cobalt Refinery flowsheet, a milestone that brings the company closer to recommissioning the only permitted cobalt refinery in North America.
First Cobalt shares advanced on the news, rising 38.7% or $0.06 to 21.5 cents on volume of over 8.0 million. The shares are currently trading in a 52-week range of 14.5 cents and $1.01.
First Cobalt is the largest land owner in the historic Cobalt, northeast Ontario region. The company controls over 10,000 hectares of prospective land and 50 historic mines as well as a mill and the only permitted cobalt refinery in North America capable of producing battery metals.
Its Kerr Lake area properties include the past producing Juno, Drummond, Kerr Lake, Lawson and Conisil mines, all of which operated primarily as silver mines.
First Cobalt recently moved to enhance its position as a pure-play North American cobalt company by acquiring all of the issued and outstanding shares of US Cobalt Inc. [USCO-TSXV; USCFF-OTCQB]. The acquisition positioned First Cobalt as a leading non-Democratic Republic of Congo (DRC) cobalt company with North American projects located in close proximity to infrastructure as well as electric vehicle and technology hubs such as Michigan and California.
The combined entity has projects in Ontario and Idaho, which, once they reach the production stage, could be major cobalt suppliers for the electric vehicle market, which now depend mostly on supply from the DRC.
“Producing battery grade cobalt sulfate is one of our most significant accomplishments as the majority of the refined cobalt for electric vehicle market is produced in Asia,” said First Cobalt President and CEO Trent Mell. “With no cobalt sulfate production in North America today, First Cobalt stands to become the first such producer for the American vehicle market,” he said.
“For our shareholders, this development brings us closer to cash flow and will be our top priority in the year ahead,” Mell added. “Third party studies have confirmed that the permitted facility could be recommissioned in 18-24 months.”
Mell went on to say that the cobalt hydroxide used in these tests is currently sold at approximately 60% of the prevailing cobalt price which could offer good margin opportunities based on the findings of the previously released restart study.
Having produced a battery grade sulfate using the First Cobalt Refinery flowsheet, the company said discussions are currently under way with automotive companies, cobalt miners and capital providers. These discussions can move to a more advanced stage, the company said.
First Cobalt said it sees the potential to produce up to 2,000 tonnes of cobalt in product per year as the process excluded the use of an autoclave circuit, allowing for an increase in plant throughput
It said the cobalt sulfate product assayed 20.8% cobalt, surpassing the reference grade for sulfate pricing. It said the produce is classified as “high purity”, achieving 99.9% purity.
First Cobalt also said it could be generating cash flow within 18-24 months from sourcing feedstock.