First Cobalt strikes exclusivity deal with lender over US$45M debt financing for refinery plans

First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) (FRA:18P) has announced another step in its bid to bring North America’s only permitted cobalt refinery back into life, saying it had struck an exclusivity agreement with a leading financial institution for US$45 million in debt financing.  The funds would go towards the capital cost of the recommissioning and expansion of the refinery in Ontario, Canada.  READ: First Cobalt strikes milestone offtake deal with London-based cobalt trader over future Ontario refinery production The exclusivity period allows the lender to complete the remaining due diligence before negotiating definitive documentation. This financing process, which is being led by CIBC Capital Markets, is expected to be completed before the announcement of a formal construction decision. "We are on track to achieving our goal of commencing construction in mid-2021 and full commissioning in the second half of 2022," Trent Mell,  the CEO of First Cobalt, told investors in a statement. "Progression into an exclusivity phase for a debt facility without a royalty or stream represents a key milestone in securing the remaining capital needed to restart the First Cobalt Refinery and brings us one step closer to our vision of producing the world's most sustainable cobalt." It comes after yesterday the group revealed it had agreed a flexible, long-term, offtake deal with London-based Stratton Metal Resources Ltd over the sale of up to 100% of annual cobalt sulfate production from the refinery. Permitting remains on schedule, while the company's strong treasury has supported pre-construction activities, including procuring long-lead equipment orders, the company noted. The formerly operating cobalt refinery sits north of Toronto and 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 (EVs). Between 1996 and 2015, it produced cobalt, nickel, and silver and First Cobalt is expanding and modifying it to refine third party cobalt hydroxide intermediate product into a high-purity, battery-grade cobalt sulfate suitable for lithium-ion batteries. Today, around 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 C$10 million investment in the First Cobalt Refinery to help accelerate commissioning and expansion. Contact the author at giles@proactiveinvestors.com