First Cobalt Corp fully focused on creating a North American cobalt supply chain

Owner of North America’s only permitted cobalt refinery Main cobalt exploration project at Iron Creek in Idaho, USA Controls significant land package in Canadian Cobalt Camp What First Cobalt does: First Cobalt Corp (CVE:FCC) (OTCMKTS:FTSSF) is focused on creating a North American cobalt supply chain through both exploration and refining. The company is the owner of North America’s only permitted cobalt refinery located in Ontario, Canada which could produce over 25,000 tonnes of cobalt sulfate per year from third party feed. Cobalt refining is a critical component in the development and manufacturing of batteries for electric vehicles and forms a foundational piece of the next generation of the North American auto sector and other electrified consumer and industrial applications. The firm is recommissioning and expanding its permitted cobalt refinery to provide battery-grade cobalt for the North American and European electric vehicle (EV) markets. Discussions are ongoing with several EV manufacturers, according to the company. The group has said it is confident that cobalt will remain a critical material in electric vehicle battery production for at least another ten years, despite Tesla’s Battery Day proclamation in September that it will produce cobalt-free batteries. Longer-term, the company said it may expand its refinery to recycle black mass from lithium-ion batteries. First Cobalt’s main cobalt exploration project is the Iron Creek Cobalt Project in Idaho, USA, which has an Indicated Resource of 2.2 million tonnes at 0.32% cobalt equivalent (0.26% cobalt and 0.61% copper) for 12.3 million pounds of contained cobalt and 29 million pounds of contained copper as well as an Inferred Resource of 2.7 million tonnes at 0.28% cobalt equivalent (0.22% cobalt and 0.68% copper) for an additional 12.7 million pounds of contained cobalt and 40 million pounds of contained copper. Drilling is expected to resume next year based on geophysics findings of this year with a goal of extending the 900-metre mineralized zone and testing new targets. In 2019, First Cobalt announced high-grade cobalt assays up to 0.5% cobalt at the Ruby prospect 1.5 kilometres south of Iron Creek, which the group said could represent additional near-surface potential for cobalt and copper mineralization on the property. The company is partnered with researchers at the Colorado School of Mines on a proposal to fund a two-year project on improving the extraction of cobalt from Iron Creek. The aim is to modify conventional methods of extraction to reduce the amount of waste and to increase the concentration of cobalt to be refined. The United States Geological Survey has deemed the Idaho Cobalt Belt to be strategically important as a domestic supply of cobalt, according to First Cobalt. The company also controls a significant land package in the Canadian Cobalt Camp spanning over 100 square kilometres, which contains more than 50 past-producing mines, including substantial silver assets. How is it doing: First Cobalt has made a busy start to 2021, both on the exploration front and in its refinery plans. On February 23, First Cobalt said a geophysical survey of its Iron Creek cobalt-copper deposit in Idaho, US, had identified several new drill targets and provided data that supports a resumption of drilling to expand the deposit and test new targets over a 2-kilometer radius at the site.  The company said high chargeability zones were detected along strike of the deposit, which it said presents an opportunity to more than double the strike length of the current mineralization. On March 1, First Cobalt completed its transaction to sell a portion of its exploration assets in the Canadian Cobalt Camp to Kuya Silver Corporation, as well as to form a joint venture to advance the remaining mineral assets. The company noted that Kuya Silver has acquired a 100% interest in the properties, which are located in the historic Kerr silver district, in consideration for a payment of $4 million, comprising of $1 million in cash and 1,437,470 Kuya common shares. Kuya Silver also has an option to earn a 70% interest in the remainder of First Cobalt's Ontario land package over the next six months by making an additional payment of $1 million, with further payments required to reach the 70% interest level. First Cobalt said Kuya will make a milestone payment of $2.5 million upon completion of a maiden mineral resource estimate of at least 10 million silver equivalent ounces on either of the Kerr assets or the remaining assets, with the payment increasing to $5 million should the resource exceed 25 million silver equivalent ounces. As well, First Cobalt said it will spend $1 million of the flow-through proceeds it raised in August 2020 on eligible expenditures, split equally between the Kerr assets and the remaining assets. Turning to its refinery plans, at the end of January, First Cobalt revealed that it has begun important logistical preparation work ahead of construction. The company said it is building a project team and has also started detailed engineering and procurement for long-lead order equipment, notably the cobalt crystallizer and solvent extraction and filtering equipment. At the same time, pilot plant test work was ongoing to assess further improvements to the refinery flowsheet, with cobalt solvent extraction expected to be completed by February 20. And negotiations were also underway with the engineering and construction contractor, Ausenco Engineering Canada. Earlier in January, First Cobalt revealed that it had signed a supply agreement with Glencore AG, along with a tentative pact with a unit of China Molybdenum Ltd (CMOC), in which it will receive 4,500 tonnes of cobalt hydroxide per year from the Democratic Republic of the Congo for use in its refinery beginning in 2022.  Then on February 17, the company said it had begun a study of “black mass” material from recycled batteries as a supplemental source of feed for its hydrometallurgical refinery.  The company said it believes the refinery could recover cobalt, nickel, copper, and potentially lithium and manganese -- in addition to planned cobalt production from primary feed. Discussions are underway with several producers of black mass.  On the management front, at the start of February, First Cobalt announced the appointments of Regan Watts as the company’s new vice-president of Corporate Affairs and Dr George Puvvada as its Refinery Technical Manager. Watts, who has more than 20 years of public and private sector experience in regulatory and corporate affairs, is expected to add US corporate and regulatory affairs to his responsibilities to help First Cobalt advance its Iron Creek copper-cobalt project in Idaho, which aligns with US President Joe Biden's US$2 trillion green energy plan. Dr Puvvada, meanwhile, has more than 25 years of industrial metallurgical experience and will be a key member of the senior leadership team tasked with executing on First Cobalt's refinery expansion and commissioning strategy and qualifying the company's cobalt sulfate product for inclusion in Western automaker electric vehicle batteries. And on the financing front, on January 22, First Cobalt closed a bought-deal offering that raised more than $9.7 million. It consisted of the sale of 31,533,000 units - including the full exercise of the over-allotment option by the underwriters - at C$0.31 per unit for aggregate gross proceeds of $9,775,230. The company said it intended to use the net proceeds for the advancement of the First Cobalt Refinery and for general corporate purposes. At the end of December 2020, First Cobalt had revealed that it will receive C$10 million in public funding from the Canadian federal government and the government of Ontario. The company said the critical funding will allow it to accelerate the commissioning and expansion of its cobalt refinery, attract new investment, and execute against its strategic business plan. Inflection points: Ongoing development of cobalt refinery More news on exploration at its Iron Creek project News on silver properties in Canada’s Cobalt Camp What the broker says: At the start of September, 2020, research house Red Cloud Securities repeated a ‘buy’ rating on First Cobalt shares and raised its price target to C$0.35 from C$0.30 on the back of the firm’s successful financing. “We believe First Cobalt’s shares are undervalued and we believe that as it advances the only permitted cobalt refinery in North America towards production the stock should re-rate towards our target,” analyst Derek Macpherson wrote in a note to clients. “We highlight that while a corporate transaction monetizing First Cobalt’s silver asset could push the stock higher in the short-term, the key to a longer-term re-rating is bringing the refinery back into production,” he added. Meanwhile, the substantial silver assets in the Cobalt Camp of Ontario could pose an interesting upside with the recent run in precious metals prices. The firm is working to assess the value of the asset in anticipation of further exploration or a potential spin-out or sale, a move that caused Macpherson to increase the estimated in-situ value of the project to C$24.9 million from C$5.6 million. What the boss says: In February's statement regarding the geophysical survey at Iron Creek, First Cobalt president and chief executive Trent Mell said: "The Idaho Cobalt Belt is America's best opportunity to rapidly develop a domestic supply of this critical mineral. With cobalt in sulfate form trading above $30/lb, this U.S. asset can become an attractive source of cobalt for the electric vehicle market. Following a remarkable year of growth in the European EV market, North America is poised to follow suit. Fast-tracking the Iron Creek Project is consistent with our strategy of producing the world's most sustainable cobalt.”  "The geophysical survey has been successful in identifying new targets on our Idaho property and potentially extending known cobalt-copper mineralization of the Iron Creek deposit. We are excited by the prospectivity of our land package and we will resume drilling over the summer months. These anomalies will be priority drill targets along with the extensive cobalt-copper mineralization on surface at the nearby Ruby Zone, which we also control," the CEO added. Contact the author at jon.hopkins@proactiveinvestors.com