Mr. Trent Mell reports
FIRST COBALT ANNOUNCES FILING OF REFINERY STUDY
First Cobalt Corp. has filed the engineering study relating to the recommissioning and expansion of the First Cobalt refinery under the company's profile on SEDAR and its website.
The engineering study was prepared by Ausenco Engineering Canada under the definitions of an Association for the Advancement of Cost Engineering (AACE) Class 3 feasibility study. The results were previously disclosed in the company's press release dated
May 4, 2020. The report includes additional details related to the underlying assumptions used in the engineering study.
The report was prepared to summarize the results of an engineering study prepared at a feasibility level related to the refinery. As a result of a review by staff of the Ontario Securities Commission, the company confirms that the report does not constitute a feasibility study within the definition employed by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), as it relates to a stand-alone industrial project, and does not concern a mineral project of First Cobalt. As a result, disclosure standards prescribed by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects are not applicable to the scientific and technical disclosure in the report. Any references to scoping study, prefeasibility study or feasibility study by First Cobalt, in relation to the refinery, are not the same as terms defined by the CIM Definition Standards and used in NI 43-101.
Trent Mell, First Cobalt president and chief executive officer, commented:
"The global pandemic has drawn attention to the risk of concentrated supply chains. With most of the world's refined cobalt produced in China, we are seeing heightened interest in a refinery that is closer to North American and European EV markets.
We initiated work programs to enhance aspects of our operating plan and to prepare amendments to our operating permits. We have also taken steps to strengthen our ESG practices by joining the Cobalt Institute. CIBC is now working with First Cobalt to advance discussions with potential partners interested in co-funding the capital cost of the refinery with Glencore. I remain very encouraged with the steady, continued progress of our team."
The company commenced a $2.1-million optimization program to build on results of the engineering study (May 13, 2020, press release). The scope of work includes additional metallurgical testing and assessment of alternative approaches to manage effluent sodium levels to lower capital and operating costs and further enhance project economics. Results are expected in August.
The company has issued 1,144,643 deferred share units (DSUs) to directors and certain officers as compensation for their services. In accordance with the company's 2019 long-term incentive plan, the DSUs were priced based on yesterday's closing price of the company's common shares on the TSX Venture Exchange. DSUs vest immediately but may not be exercised until a director ceases to serve on the board, thus aligning director interests with shareholders. The company has also issued 1.05 million restricted share units (RSUs) and incentive grants to employees to purchase an aggregate of 2.2 million common shares of First Cobalt exercisable at yesterday's closing price of 14 cents for a period of five years. RSUs will vest in three equal tranches and will be settled in shares based on yesterday's closing price. Compensation for senior management was significantly reduced in 2019 due to challenging market conditions and long-term incentive grants are a key retention and incentive tool for key employees and remain subject to the approval of the TSX Venture Exchange.
About First Cobalt Corp.
First Cobalt owns North America's only permitted cobalt refinery. Cobalt refining is a critical component in the manufacturing of batteries for electric vehicles, consumer electronics and industrial applications. Cobalt is a critical mineral and forms a foundational piece of the next generation of the North American auto sector.
We seek Safe Harbor.
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