TORONTO, March 29, 2021 /CNW/ - First Cobalt Corp. (TSXV: FCC) (OTCQX: FTSSF) (the "Company") today announced that it signed a flexible, long-term, offtake agreement with Stratton Metal Resources Limited ("Stratton Metals") for the sale of future cobalt sulfate production from the First Cobalt Refinery located in Ontario, Canada.
- First Cobalt will have the option to sell up to 100% of its annual cobalt sulfate production to Stratton Metals once its refinery is in production. Quantities will be determined by First Cobalt in advance of each calendar year and are subject to a minimum annual quantity
- Provides flexibility for First Cobalt to enter into offtake contracts with OEMs and their suppliers, reducing amounts made available to Stratton Metals
- Contract term of five years matches the term of First Cobalt's feed supply agreements and anticipated term of its credit facility
- Sale price will be based on prevailing market price at the time of shipment
This announcement is consistent with the Company's strategy of bringing battery grade cobalt to the North American EV market. The ability to elect the annual quantity sold to Stratton Metals will provide the Company with time and flexibility to advance offtake and battery recycling discussions with potential OEM partners.
"Stratton Metals are among the most knowledgeable cobalt traders in the world, with a network of relationships in every major market", said Trent Mell, President and Chief Executive Officer. "This sales arrangement is a key milestone for the Company as firming up commercial arrangements supports the financing process for the refinery expansion. Refinery commissioning remains on schedule for October 2022. We look forward to working with Stratton to supply the world's most sustainable cobalt to the electric vehicle market."
The five-year offtake contract matches the expected term of a project debt facility currently being negotiated as well as long-term arrangements for refinery feedstock. In January 2021, First Cobalt concluded five-year cobalt hydroxide feed purchase arrangements with Glencore AG and IXM SA. The offtake arrangement with Stratton represents a long-term partnership arrangement that will assist First Cobalt as it enters the cobalt sulfate market and qualifies its product with various cathode and battery cell manufacturers. Stratton Metals will be paid a fee relating to the cobalt sulfate sales made under this agreement.
First Cobalt intends to market a premium brand of cobalt that is ethically sourced and has one of the lowest (and potentially the lowest) greenhouse gas emissions in the industry. First Cobalt will continue to partner with leaders in the cobalt industry to produce a premium, sustainable source of cobalt for the rapidly growing EV market.
The First Cobalt Refinery is a hydrometallurgical cobalt refinery located north of Toronto, in the community of Temiskaming Shores. The facility operated from 1996 to 2015, producing cobalt, nickel, and silver. The Company is expanding the facility and modifying the flow sheet to refine third party cobalt hydroxide intermediate product into a high purity, battery grade cobalt sulfate suitable for lithium-ion batteries. Today, approximately 80% of cobalt sulfate is made in China and there is no production in North America. In December 2020, the Government of Canada and the Government of Ontario announced a joint $10 million investment in the First Cobalt Refinery to help accelerate commissioning and expansion.
About Stratton Metals
Stratton Metal Resources Limited is a London-based metals trader that specializes in offtake and marketing of base metals on a world-wide basis, with a particular focus on nickel and cobalt. Their team of professionals brings together a wide range of experience in commodity trading, trade finance, marketing and logistics. Stratton Metals is committed to acting ethically and with integrity in its dealings and relationships with suppliers and customers throughout the world. For more information on Stratton Metals contact Tony Southgate at +44.7395.790.311.
About First Cobalt
First Cobalt's mission is to be the most sustainable producer of battery materials. The Company owns North America's only permitted cobalt refinery, a critical asset in the development and manufacturing of batteries for electric vehicles. First Cobalt owns the Iron Creek cobalt-copper project in Idaho, USA as well as several significant cobalt and silver properties in the Canadian Cobalt Camp.
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Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects', "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved". Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance and opportunities to differ materially from those implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are set forth in the management discussion and analysis and other disclosures of risk factors for First Cobalt, filed on SEDAR at www.sedar.com. Although First Cobalt believes that the information and assumptions used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, First Cobalt disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.