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F E B R U A R Y / M A R C H 2 0 1 8 www.resourceworld.com 49 Idaho Cobalt Project moves closer to production eCobalt Solutions intends to identify its offtake and financial partners in early 2018 by Robert Simpson O n the heels of a positive feasibil- ity study which moves eCobalt Solutions Inc. [ECS-TSX; ECSIF- OTC] a step closer to final construction of its Idaho Cobalt Project, changes in the lithium battery supply chain have the company rethinking the cobalt production facility to produce cobalt sulphate in favour of pro- ducing cobalt concentrate. "Due to changes in the battery market dynamics and in response to discussions with numerous offtake parties, the com- pany has determined delivering a clean cobalt concentrate product is the fastest route to production, generating cash-flows and reducing the price and technical risk to the project," says Paul Farquharson, President and CEO of eCobalt Solutions. The November 2017 feasibility study for the Idaho Cobalt Project, 26 miles west of Salmon, Idaho, was based on an under- ground mine with a target production rate of 800 tons per day and a life-of-mine pro- duction of 31.8 million pounds of cobalt, 42.8 million pounds of copper and 39,241 ounces of gold. The mine life of the proj- ect is 12.5 years with a weighted average annual production of 2.4 million pounds of cobalt, 3.3 million pounds of copper and 3,000 ounces of gold and an estimated pre- production period of 24 months utilizing a 0.25% cobalt cut-off grade. The economic model uses a 34% corporate tax rate and a (7.5% discount) producing an after-tax NPV of $135.8 M and an IRR of 21.3% using an average base case price of $26.65/ lb for contained cobalt in cobalt sulphate. In the feasibility study, the total capital cost of the Idaho Cobalt Project is US $187 million of which US $124 million, or 66%, was allocated to the cost of the Cobalt Production Facility. And given 34% of direct costs of production were related to the Cobalt Production Facility, the com- pany believes producing a clean cobalt concentrate product will result in a signifi- cant improvement on the overall project economics. Opportunities to optimize the proj- ect economics are being evaluated along with advancing offtake discussions. eCo- balt engaged Micon International Ltd., SNC Lavalin and Dundee Sustainable Technologies to conduct detailed metal- lurgical testing and engineering to develop feasibility level designs and costs for the revised mine plan. The Idaho Cobalt Project has proven and probable reserves of 3,661,894 tons containing 34,516,925 pounds of cobalt averaging 0.47% cobalt, 53,286 ounces gold averaging 0.16 oz/ton gold, and 49,755,545 pounds copper at 0.68%. The measured an indicated resource could add another 40,577,700 pounds of cobalt at 0.59%, 54,200 ounces of gold at 0.016 oz/ton and 50,435,500 pounds of copper grading 0.73%. Further to the 2017 feasibility study, the company has completed a three-hole, 5,000-metre drill program aimed at upgrad- ing a portion of the inferred resources to higher confidence indicated resources for inclusion in the feasibility study. So far, results from the first two drill holes have been positive and will, in all probability, serve to increase the indicated resource estimates. All of the environmental permits are in place for the Idaho Cobalt Project, includ- ing a final Environmental Impact Statement and positive decisions from both the U.S. Department of Agriculture National Forest Service and the US Environmental Protection Agency (EPA) making the Idaho Cobalt Project the only permitted primary cobalt deposit in the Unites States. A previous feasibility study conducted in 2008 helped the company to secure financing and invest US $65 million on the initial construction work on the project, including about 90% of the earthworks and US $16 million to purchase longer- lead-time equipment including the major components of the mill and concentrator, including the ball mill, flotation cells, hop- pers and grizzlies. According to an eCobalt New release, "the company has begun receiving Letters of Intent for offtake and project financing from multiple parties based on this new strategy and intends to identify its partner or multiple partners by early 2018." In a marketing report commissioned by eCobalt with CRU Consulting London, UK to provide data and forecast on cobalt and by product markets, CRU expects global refined "cobalt demand to approach 166,210 tonnes by 2026 (2016 – 96,000 tonnes). Demand is forecast to grow at 6% compound annual growth rate (CAGR) in the mid-term spurred on by growing demand for lithium ion batteries. Demand will then increase at CAGR 4.1% in the long-term (2021-2026) as the EV sector matures and the metals sector continues to grow robustly." n MINING Overlooking the mine site for the Idaho Cobalt Project, 26 miles west of Salmon, Idaho. Photo courtesy eCobalt Solutions Inc.