The base case scenario would see the refinery resume operations at 24 tonnes per day, the company said, with production of cobalt sulfate for the lithium-ion battery market or cobalt metal for the US aerospace industry, the North America pure play cobalt company said.

According to company chief executive officer Trent Mell, permits are already in place and there is a short timeline to potential production, as well as optionality for both sources of material and refined product. The refinery has been on care and maintenance for three years.

“Future offtake partners may offer flexibility with financing options to minimize dilution as we move forward,” he said.

“We believe that the single best use of the refinery is to provide cobalt for the US market, which does not currently produce a meaningful supply,” he added.

Three independent studies supporting a restart of the refinery were recently completed, with a focus on capital requirements, operating costs, permit renewal timelines, potential feedstock options and offtake opportunities.

Under a 24 tpd production scenario, the refinery could produce between 568 tonnes and 1,063 tonnes of cobalt annually with a capital cost of the restart at around $25.7 million, including a 30% contingency, and an annual operating cost of $6.7 million.

The study also considers an expansion scenario of up to 50 tpd.

The permitting review concluded that a restart is possible within 18 months of selecting a feedstock under the base case scenario. Potential feed material includes cobalt concentrate from mining operations, ethically-sourced cobalt hydroxide material from the Democratic Republic of Congo, and recycled battery materials from North America, First Cobalt said.

“At this time, we are working with engineering and market consultants to assess the suitability and margin opportunities of various feed sources. This process includes a review of design modifications to the existing refinery flow sheet and the resulting impact on capital and operating costs,” Mell said.

“While no decision for start-up has been made to move forward, we are reviewing funding alternatives that would minimize equity dilution for our shareholders today and in the future,” he added.

The refinery is a hydrometallurgical cobalt-silver-nickel refinery in the Canadian Cobalt Camp, roughly 500km from the US border. The facility was commissioned in 1996 and has a daily nominal throughput of between 12 tonnes and 24 tonnes.

Over the past year, four cobalt companies have come together under the First Cobalt banner to create a vertically integrated cobalt company with assets in Idaho in the US and Ontario, Canada.

Metal Bulletin's assessments of the prices of low- and high-grade cobalt, a key raw material used in the production of EV batteries, peaked at 10-year highs in April but slid lower for several months from May after cheap selling from China met weak summer demand elsewhere.

However, spot prices for high-grade cobalt resumed their upward trend in August and Fastmarkets MB assessed the material at $33.50-34.40 per lb, in-warehouse, on October 8 due to buyers continuing to pay up for tightly-available briquettes and broken cathodes

Low-grade cobalt prices rose to a parity with high-grade prices, up from $33.50-34.25 per lb, where they had been quoted since September 19.