VANCOUVER, Dec. 7, 2017 /PRNewswire/ - eCobalt Solutions
Inc. (TSX: ECS; OTCQX: ECSIF; Frankfurt: ECO) ("eCobalt" or the
"Company") is reporting that significant progress has been made to
date on optimization of the Idaho Cobalt Project ("ICP") resulting
in a new direction to produce a clean (low arsenic
content) cobalt concentrate product, an upstream precursor
material for battery cathode production, that may result in
material reduction of capital and operating cost at the Cobalt
Production Facility ("CPF"). This product change and other
project optimization efforts have the potential to result in a
significant improvement in economics for the ICP. This new
opportunity is being pursued in response to changes in battery
supply chain dynamics and in-depth discussions with potential
offtake partners.
Mr. Paul Farquharson, President
and C.E.O. of the Company commented: "Consolidation of battery
materials manufacturing in China
to decrease cost and increase production capacity has reduced the
premium in the price of cobalt sulphate over cobalt metal.
Due to these changing battery market dynamics, and in
response to discussions with numerous potential offtake parties,
the Company has determined that delivering a clean cobalt
concentrate product is the fastest route to production, generation
of cash-flows and reduction of price and technical risk to the
project. A clean cobalt concentrate is an upstream material
for battery cathodes compared to cobalt sulphate which would
eliminate the requirement to build a full CPF, as reported in the
September 27, 2017 Feasibility Study,
which is expected to result in substantially reduced capital and
operating cost for a more simplified flow sheet. The significant
incremental capital investment required to build a full CPF is not
supported by the forecast price differential between cobalt
concentrate and cobalt sulphate. Initial offtake terms
received have indicated attractive pricing for the ICP's clean
cobalt concentrate product due to the product's unique high cobalt
content and medium to long term cobalt supply constraints resulting
in a considerable improvement in project economics. We
are very excited about this new path as it further de-risks the
project and has the potential to significantly decrease total
capital requirements. The Company's original project
initiation timeline is not altered." He concluded; "Urgency
among OEMs' to secure cobalt supply has driven the price of cobalt
to US$30 per lb. which drives the
desire for the ICP to achieve early production to deliver optimal
value to its shareholders."
Clean Cobalt Concentrate Production
In response to changing battery market dynamics and in-depth
discussions with potential off-takers during Senior Management's
recent marketing campaigns in North
America, Asia, Australia and Europe, there is an opportunity to reduce
capital and operating cost at the CPF and improve construction
timelines by pursuing a clean cobalt concentrate product and
by-product of copper/gold concentrate. Clean cobalt
concentrate is an upstream product, containing less than 1%
arsenic, that is used in the production of precursor battery
cathode material. Since it is a less refined product compared to
cobalt sulphate, investment in a CPF can be reduced to a fraction
of the capital identified in the September
27, 2017 Feasibility Study ("FS").
The total capital cost estimate for the ICP per the FS is
US$187M of which US$124M (66%) is for the CPF. Operating
cash cost for the ICP, net of by-product credits, is US$5.05/lb cobalt, of which US$13.88 is direct cost before by-product credits
and 34% of direct cost is related to the CPF. Based on
today's LME cobalt price of US$30.00/lb (Co-99.3%), the ICP's after tax NPV
(7.5% discount rate) and IRR per the FS is US$183M and 25.5% respectively. Since
capital and operating cost to produce cobalt sulphate at the CPF
formed a significant burden on project economics, the Company
believes that a more simplified flowsheet to produce a clean cobalt
concentrate product may result in material reduction in both of
these areas which may have a further significant positive impact on
overall project economics.
These opportunities are being further evaluated by advancing
offtake discussions and detailed CPF design to pursue this optimal
direction. To this end, the Company has engaged Micon
International Ltd. ("Micon"), SNC Lavalin and Dundee Sustainable
Technologies to conduct detailed metallurgical testing and
engineering for the revised flowsheet with the intent to develop
feasibility level designs and costs for the revised
flowsheet. The Company has begun receiving Letters of Intent
for offtake and project financing from multiple parties on this new
strategy and intends to identify its partner(s) by early 2018 after
thorough evaluation.
Mineral Resource and Reserve Optimization
The Company has completed the planned three-hole, 5,000-foot
drill program on schedule. The three completed holes all
intersected mineralized zones anticipated in the FS resource model.
Based on core logging, and pending assay results, this drill
program is expected to have a positive impact on the project's
resource model. The Company has engaged Micon to update the
FS resource model in Q1 2018 once assays are received. In
addition, a fourth drill hole is in progress in coordination with
an independent geotechnical firm to provide rock mass data and
acquire additional mineralized material for metallurgical testing
and detailed engineering.
The Company has also engaged Micon to evaluate a detailed mine
design and production schedule developed in-house with third party
consultants to reduce planned dilution. Working with Micon, this
design enhancement will be applied to the updated resource model
and evaluated using Micon's FS cost model. The Company
believes the updated resource and mine plans will have a positive
impact on mine units costs per lb of cobalt and life of mine cobalt
production which would positively impact project economics.
E.R. (Rick) Honsinger, P.Geo.,
Senior V.P. with eCobalt, is the Qualified Person who has reviewed
and approved the contents of this news release.
___________________________________________________
About eCobalt Solutions Inc.
(www.eCobalt.com)
eCobalt is a well-established Toronto Stock Exchange listed
company committed to providing ethically produced, environmentally
sound, battery grade cobalt products, essential for the rapidly
growing rechargeable battery and renewable energy sectors, made
safely, responsibly, and transparently in the United States. The Company's ICP, located
in East Central Idaho, is the only environmentally permitted,
primary cobalt project in the United States. It is 100% owned
by the Company's wholly owned subsidiary, Formation Capital
Corporation, U.S.
eCobalt Solutions Inc.
"J. Paul
Farquharson"
J. Paul
Farquharson
President & CEO
Cautionary Statement on Forward Looking Statements
This news release contains "forward-looking statements" within
the meaning of applicable Canadian securities legislation.
Statements in this news release pertaining to expected financings,
filings, uses of proceeds or project completion dates are
forward-looking statements. These forward-looking statements are
based on assumptions and address future events and conditions and
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward-looking statements.
Forward-looking statements are not guarantees of future results,
performance or achievement. These risks, uncertainties and factors
include general business, economic, competitive, political,
regulatory and social uncertainties; actual results of exploration
activities and economic evaluations; fluctuations in currency
exchange rates; changes in project parameters; changes in costs,
including labour, infrastructure, operating and production costs;
future prices of cobalt; variations of mineral grade or recovery
rates; operating or technical difficulties in connection with
exploration, development or mining activities, including the
failure of plant, equipment or processes to operate as anticipated;
delays in completion of exploration, development or construction
activities; changes in government legislation and regulation; the
ability to maintain and renew existing licenses and permits or
obtain required licenses and permits in a timely manner; the
ability to obtain financing on acceptable terms in a timely manner;
contests over title to properties; employee relations and shortages
of skilled personnel and contractors; the speculative nature of,
and the risks involved in, the exploration, development and mining
business.
Such projections are and will inevitably always be dependent on
assumptions about future mineral prices and development costs which
will be subject to fluctuation due to global and local economic and
industry conditions. Further information regarding risks and
uncertainties which may cause results to differ from those
contained in forward-looking statements is included in filings by
the Company with securities regulatory authorities and is available
at www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Although the Company has disclosed that the ICP
remains the sole, near term, environmentally permitted, primary
cobalt deposit in the United
States and offers a unique potential for North American
consumers to secure an ethically sourced, environmentally sound
supply of battery grade cobalt products, there is no guarantee that
the Company will attain commercial production of such cobalt
products for use in the rechargeable battery sector. Accordingly,
readers should not place undue reliance on forward-looking
statements. The Company does not undertake to update any
forward-looking statements that are contained herein, except in
accordance with applicable securities laws.
The statements contained in this news release in regard to
eCobalt that are not purely historical are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including eCobalt's beliefs, expectations,
hopes or intentions regarding the future. All forward-looking
statements are made as of the date hereof and are based on
information available to eCobalt as of such date. It is important
to note that actual outcome and the actual results could differ
from those in such forward-looking statements. Factors that could
cause actual results to differ materially include risks and
uncertainties such as technological, legislative, corporate,
commodity price and marketplace changes.
SOURCE eCobalt Solutions Inc.