Electra Battery Materials has secured US$5 million ($6.9 million) from its own lenders to spend on its unfinished Temiskaming cobalt refinery.
In an Oct. 25 news release, the aspiring mineral processor announced it has a non-binding term sheet from the holders of secured notes issued by the company to raise financing that will be earmarked for “early works and winter preparations” at its refinery project in northeastern Ontario and other corporate purposes.
Construction was halted last year due to raising project costs caused by inflation. The former Yukon refinery, between the town of Cobalt and Temiskaming Shores, has been refurbished and expanded to be capable of producing 6,500 tonnes of processed cobalt sulfate a year.
Electra needs US$60 million ($83.3 million) to finish the refinery.
About a third of that was addressed when the U.S. Department of Defense provided US$20 million (more than $27 million) last summer as discussions continue with other potential financiers. In September, Electra said it obtained a $20 million non-binding term sheet from an undisclosed “arm-length strategic player” in the battery materials industry.
This latest financing is a combination of US$4 million in secured convertible notes and US$1 million of common shares at price of US$0.543 a share. The notes can be converted into common shares of Electra at US0.62445 a share, at a 15 per cent premium to the price of shares issued in connecting with the financing.
Electra recently hired a construction manager for a resumption of activity at the site later this fall or early this winter.
Electra promotes itself as a key player in the critical minerals supply chain with the only cobalt refinery in North America. The company’s ambition is to eventually build out a larger critical minerals industrial hub that would serve the electric vehicle (EV) market.
As a technology startup company, the refinery would be a mid-stream processing plant that would take mined cobalt material and convert it into an upgraded material used by battery manufacturers in the EV sector.
“Given our objective of resuming construction shortly upon completing the project financing package, part of our preparations for the final phase of construction of North America’s only cobalt sulfate refinery is initiating some early works before winter sets in,” said Electra CEO Trent Mell in a statement. “This liquidity strengthens our balance sheet as we work to complete this package, and we are grateful for our lenders’ ongoing support of our business plan.
“Reducing heavy reliance on China in the EV materials supply chain continues to be a focus for North American policymakers,” Mell said. “Electra’s Refinery is expected to be the first of its kind in North America, with the potential, when operating at full utilization, to produce enough cobalt sulfate for one million electric vehicles each year.”
