The package is comprised of $37.5 million of 6.95% senior secured convertible notes due December 2026 and C$9.5 million of equity via an overnight-marketed public offering of stock in which the company said every director and officer will participate.
"This is one of our most important catalysts for the year, as this financing will allow us to advance construction of our Canadian battery material refinery," said First Cobalt president & CEO Trent Mell. "Our vision is to be the most sustainable producer of battery materials, starting with North America's only domestic supply of battery grade cobalt. Longer term, we are pursuing the creation of a battery park around our refinery, which would include battery recycling, nickel sulphate production and lithium-ion battery precursor manufacturing."
The refinery was commissioned in 1996 and has been on care and maintenance since 2015. The recommissioning and expansion from 1,200 tonnes per year of cobalt to 5,000tpy will take 18 months with the company looking to produce 25,000tpy of cobalt sulphate product according to the May 2020 feasibility study.
First Cobalt has five-year feed purchase contracts in place with Glencore and a subsidiary of China Molybdenum, to provide 4,500tpy of contained cobalt from late 2022. Glencore will supply cobalt hydroxide from its Kamoto Copper operation while China Moly will supply from Tenke Fungurume, both in DRC.
In March, First Cobalt arranged a five-year deal to sell up to 100% of its future annual cobalt sulphate production to London-based trader Stratton Metal Resources. The Stratton deal would be subject to a minimum annual quantity but had the flexibility for First Cobalt to enter into offtake contracts with OEMs and their suppliers, reducing amounts made available to Stratton, First Cobalt said.
Shares in First Cobalt are trading at C30c, valuing the company at $151 million