Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V:
ELBM) (“Electra” or the “Company”) today reported its financial
results for the quarter and year ended December 31, 2022, and
provided an update on the commissioning of its cobalt refinery and
its black mass recycling trial. All amounts are in Canadian
currency unless otherwise stated.
“2022 was a remarkable year for Electra, filled with
achievements and developments that augur extremely well for our
Company and our prospects of becoming a key link in the North
American EV battery supply chain,” said Trent Mell, Electra’s CEO.
“Most notably, we made considerable progress towards our vision of
commissioning North America’s first cobalt sulfate refinery, we
launched a plant-scale black mass recycling trial at our refinery
complex north of Toronto that has already produced a number of
encouraging results, and we signed a three-year strategic supply
agreement with LG Energy Solution, the world’s second-largest EV
battery manufacturer. Equally significant, we benefitted from the
adoption of the U.S. Inflation Reduction Act, which has provided a
boost for our industry and includes a number of incentives that
will spur further growth of the EV supply chain in North America
for years to come.”
Mr. Mell added, ”Although some of our progress was impeded by
supply chain disruptions, receipt of damaged equipment, and the
impact of inflationary price pressures on our refinery project, we
remain particularly encouraged by our near- and long-term
prospects. Most notably, we anticipate completion of a re-baseline
engineering report on our refinery project as well as the first
shipment of products produced in our black mass trial in the near
term.
“Over the longer term, we are encouraged by the opportunity to
expand into the production of related battery materials, including
nickel sulfate at our refinery complex in Ontario, and by the
prospects of developing a new cobalt sulfate refinery as part of
the battery industrial park being built in Bécancour, Quebec.”
Mr. Mell concluded, “Key to our ongoing success will be to
leverage our hydrometallurgical process expertise and the benefits
of operating in North American jurisdictions where low-carbon
production is possible due to an abundance of renewable energy
sources.”
ELECTRA Q4 2022 HIGHLIGHTS AND DEVELOPMENTS
- Net income for the period was $10.3 million or $0.31 per share.
These compare to a net loss of $15.5 million or $0.55 per share for
Q4 2021. Net income in Q4 2022 was driven by a gain of $11.9
million on the fair value of the of the embedded derivative
liability portion of Electra’s convertible debt and an impairment
reversal of $1.3 million recognized on the planned sale of the
remaining Cobalt Camp exploration patents to Kuya Silver.
- Held cash and marketable securities of $8.4 million as at
December 31, 2022, down from $19.7 million as at September 30,
2022. Electra’s cash balance at the end of Q4 2022 does not include
the remaining $5.1 million of government investments expected to be
received or the net proceeds of US$14 million received from the
convertible debt financing completed in February 2023.
- Raised gross proceeds of US$5.5 million (~CAD$7.3 million)
through an overnight marketed offering of 2.35 million units with
each unit comprised of one common share and one share purchase
share warrant entitling the holder to purchase one common share at
a price of US$3.10 through November 15, 2025. Gross proceeds raised
through the offering will be used to fund the commissioning of
Electra’s cobalt sulfate refinery.
- Launched a black mass recycling trial at the Company’s Ontario
refinery complex to recover high-value elements found in shredded
lithium-ion batteries, including lithium, nickel, cobalt, copper,
manganese, and graphite, using Electra’s proprietary
hydrometallurgical process.
- Acquired the option to purchase the CAS cobalt-copper project
in Idaho, property located in close proximity to the Company’s
other exploration projects in Idaho, for up to US$1.5 million
payable over 10 years upon completion of specific milestones.
- Issued a total of 571,317 common shares on the TSX Venture
Exchange at an average price of C$5.34 per share and 135,670 common
shares on the Nasdaq Capital Markets at an average price of US$3.21
during the year under its at-the-market equity program launched in
January 2022, providing gross proceeds of $3,049,834 and
US$435,756. Commissions of $76,246 and US$10,894 were paid to CIBC
World Markets Inc. and CIBC World Markets Corp., respectively, in
relation to these distributions.
Highlights for 2022
- Net income for FY2022 was $12.6 million or $0.38 per share.
These compare to a net loss of $34.9 million or $1.26 per share for
the year ended December 31, 2021. Net income in FY2022 was driven
by a gain of $27.7 million on the fair value of the embedded
derivative liability portion of Electra’s convertible debt.
- Signed a three-year agreement to supply 7,000 tonnes of battery
grade cobalt to LG Energy Solution, a leading global manufacturer
of lithium-ion batteries for electric vehicles.
- Total incurred costs for the refinery construction project in
2022 were $71 million.
- Commenced trading on Nasdaq Capital Market under the ticker
symbol "ELBM" on April 27, 2022.
- Announced preliminary discussions with the Government of Quebec
to construct a new cobalt sulfate refinery in Bécancour, Quebec
that will integrate with an emerging battery materials park in the
province.
- Signed a benefits agreement with the Métis Nation of Ontario
that will provide employment, training, procurement, and business
opportunities related to the construction and expansion of
Electra’s battery materials refinery north of Toronto.
- Strengthened the management team with the appointment of Renata
Cardoso as Vice President Sustainability and Low Carbon, Craig
Cunningham as Chief Financial Officer, Dave Marshall as Vice
President, Engineering, and Joe Racanelli as Vice President,
Investor Relations. The additions bring collectively 100 years of
relevant sector experience and subject matter expertise to
Electra.
- Released highlights of a scoping study prepared by a global
engineering firm that supports the creation of an integrated
electric vehicle battery materials park in Ontario consisting of
nickel, cobalt, manganese refining, recycling of battery black mass
material, and precursor cathode active material (pCAM)
manufacturing. The scoping study assessed the economics and carbon
footprint of various nickel feed options to develop an integrated
facility producing 10,000 tonnes per annum of battery grade nickel
sulfate and pCAM components essential to the production of EV
batteries.
- Confirmed cobalt mineralization at its Ruby prospect, which is
located 1.5 kilometres from Electra’s primary Iron Creek deposit,
following receipt of assay results from the summer exploration
program in the Idaho Cobalt Belt. Assay results and exploration
work completed to date support the launch of a more extensive drill
campaign to determine the full extent of Ruby’s
mineralization.
Highlights Subsequent to Year End
- Successfully completed the first plant-scale recycling of black
mass material in North America and confirmed the recovery of
critical metals, including lithium, nickel, cobalt, copper,
manganese, and graphite, needed for the EV battery supply chain
using Electra’s proprietary hydrometallurgical process. To date,
Electra has produced high quality nickel-cobalt mixed hydroxide and
lithium carbonate products in its black mass recycling trial at its
refinery complex.
- Based on preliminary results achieved to date, Electra will
extend its black mass trial through to June 2022 beyond the initial
target of 75 tonnes.
- Disposed non-core exploration assets in the Canadian cobalt
camp to Kuya Silver Corporation for 2.7 million shares of Kuya
valued at $1 million. Electra retained a two percent royalty on net
smelter returns from all commercial production derived from the
assets.
- Closed a private placement offering for the issuance of US$51
million principal amount of 8.99% senior secured convertible notes
(“Note Offering”) due February 2028. As part of the Note Offering,
Electra also announced that it purchased and cancelled all of the
previously outstanding 2026 Notes at par value, plus accrued and
unpaid interest. The net proceeds of the Note Offering of
approximately US$14 million will be used for capital expenditures
associated with the expansion and recommissioning of the Company’s
cobalt refinery, including buildings, equipment, infrastructure,
and other direct costs, as well as engineering and project
management costs.
- Issued its inaugural Sustainability Report and committed to
net-zero greenhouse emissions by 2050.
Refinery Project Update
As at March 31, 2023 Electra has made the following key
developments in its refinery project:
- Completed commissioning of the analytical lab, feed material
handling system, including the ball mill and mixing station, filter
presses, and reagent handling systems.
- Completed 90 to 95 percent of all procurement.
- Completed the erection of the solvent extraction building.
- Completed the construction of the cobalt sulfate loadout
facility.
- Increased the project owners’ team to 31 personnel, which
includes tradespeople, engineers, operators, lab technicians, and
office support staff.
On February 14, 2023 Electra announced that due to the receipt
of damaged equipment critical to the completion of the refinery
project and ongoing supply chain disruptions causing ongoing delays
in the delivery of equipment, including components to process
control systems, the Company withdrew its previous guidance
relating to the refinery project’s estimated capital spend and
construction timelines. Subsequent inspection of the damaged
equipment has determined that the falling film evaporator vessel is
suitable for installation. The damaged equipment will require
onsite repairs before it can be commissioned.
Also on February 14, 2023 Electra announced the launch of a
re-baseline engineering report to identify the refinery’s updated
project scope, scheduling, and capital expenditures. This updated
re-baseline engineering work, which has been undertaken by the
refinery project’s engineering, procurement, and construction (EPC)
contractor, continues. The findings will be reviewed by an
independent third-party estimator and presented to the Company’s
board. Although results are still pending, management anticipates
that the capital costs will be higher due to inflation,
construction delays and the completion of detailed engineering.
In particular, given inflationary price pressures over the past
year that have negatively impacted all aspects of the refinery
project, including contractor labour rates and costs for concrete,
steel, and piping, Electra expects that the re-baseline engineering
report will conclude that capital costs for completing the refinery
project will be higher than the $105 million budget previously
disclosed. The Company will require additional capital to complete
final commissioning. Discussions are underway with various
commercial partners, government agencies and other parties to
address the funding shortfall.
Electra will provide an update on its refinery project once the
re-baseline engineering report is completed.
Black Mass Trial Update
Late in 2022, Electra launched a black mass trial at its
refinery complex north of Toronto to recover and recycle high-value
elements from black mass, including lithium, nickel, cobalt,
copper, manganese and graphite, found in shredded lithium-ion
batteries.
Electra has achieved a number of encouraging results since the
trial began:
- On February 14, 2023, Electra confirmed that it had
successfully completed the first plant-scale recycling of black
mass material in North America and recovered critical metals needed
for the electric vehicle battery supply chain using its proprietary
hydrometallurgical process.
- On March 13, 2023, Electra announced that it recovered lithium,
a critical mineral needed for the electric vehicle EV battery
supply chain. The recovery and subsequent production of a
technical-grade lithium carbonate product in a plant-scale setting
validate Electra’s proprietary hydrometallurgical process.
- Also, in March 2023 Electra produced a mixed hydroxide
precipitate (MHP) at contained metal grades for nickel and cobalt
above quoted market specifications.
- Recoveries within the MHP circuit, which produces the highest
value product in the black mass recycling process, have been
equivalent to and at times superior to bench scale results achieved
previously.
- As a result of successes achieved to date, Electra has elected
to extend its black mass trial through to June 2023, beyond the
initial target of 75 tonnes.
“Electra’s ‘Proof-Partner-Build’ strategy for battery recycling
is premised on demonstrating a viable refining process and then
partnering with battery makers to build dedicated capacity that can
be integrated into their supply chains,” said Mr. Mell. “Our early
success has already generated interest from battery supply chain
companies who are looking for viable North American battery black
mass refining solutions. Over the coming months, we expect
continued validation of our hydrometallurgical process, ongoing
improvements to extraction and recovery rates, and the start of
product shipments to customers.”
All of the Company’s recovered material will be sold to
third-party companies for additional processing and re-use in a
number of applications. A first shipment of MHP product is expected
to be delivered to downstream clients for evaluation purposes in
early Q2 2023.
Pending completion of the black mass trial and evaluation of
project economics expected in Q2, success could pave the way
towards commercialization. Using the existing refinery footprint,
infrastructure and plant equipment, Electra could quickly expand
throughput to 2,500 tonnes per year of black mass under a
continuous operation scenario. A desktop study is underway, and
results will be shared once available. A larger facility of 5,000
tonne or more per annum of black mass is another option Electra may
consider with a commercial funding partner.
For complete details of the consolidated financial statements
and the associated management’s discussion and analysis, please
refer to the Company’s filing on SEDAR (www.sedar.com) or the
Company’s website (www.ElectraBMC.com).
Electra will host a conference call on April 5, 2023 at 8:30 am
ET to review its fourth quarter performance and discuss near-term
outlook.
Dial-in and Webcast Details:
- North American dial-in number: 1-800-319-4610 - International
dial-in number: 1-604-638-5340 - Webcast and slide
presentation:
https://ElectraBMC.com/category/events/
About Electra Battery Materials
Electra is a processor of low-carbon, ethically-sourced battery
materials. Currently commissioning North America’s only cobalt
sulfate refinery, Electra is executing a multipronged strategy
focused on onshoring the electric vehicle supply chain. Keys to its
strategy are integrating black mass recycling and nickel sulfate
production at Electra’s refinery located north of Toronto,
advancing Iron Creek, its cobalt-copper exploration-stage project
in the Idaho Cobalt Belt, and expanding cobalt sulfate processing
into Bécancour, Quebec. For more information visit
www.ElectraBMC.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and
forward-looking information (together, “forward-looking
statements”) within the meaning of applicable securities laws and
the United States Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, are
forward-looking statements. Generally, forward-looking statements
can be identified by the use of terminology such as “plans”,
“expects”, “estimates”, “intends”, “anticipates”, “believes” or
variations of such words, or statements that certain actions,
events or results “may”, “could”, “would”, “might”, “occur” or “be
achieved”. Such forward-looking statements include, without
limitation, statements regarding the potential for additional
funding from the Federal government of Canada and the government of
Ontario and the quantum and terms thereof, adjustments of interest
rates on the occurrence of certain events which may impact the
attributes of the notes and warrants issued under the Note
Offering, including but not limited to a “green bond” designation,
and the effective conversion rate of the Notes and Warrants, which
is subject to adjustment in certain circumstances, the listing of
the Common Shares underlying the notes and the warrants issued
under the Note Offering on TSXV and NASDAQ, and the expected use of
proceeds of the Offering. Forward-looking statements are based on
certain assumptions, and involve risks, uncertainties and other
factors that could cause actual results, performance, and
opportunities to differ materially from those implied by such
forward-looking statements. Among the bases for assumptions with
respect to the potential for additional government funding are
discussions and indications of support from government actors based
on certain milestones being achieved. Factors that could cause
actual results to differ materially from these forward-looking
statements are set forth in the management discussion and analysis
and other disclosures of risk factors for Electra Battery Materials
Corporation, filed on SEDAR at www.sedar.com and with on EDGAR at
www.sec.gov. Other factors that could actual results to differ
materially include changes with respect to government or investor
expectations or actions as compared to communicated intentions, and
general macroeconomic and other trends that can affect levels of
government or private investment. Although the Company believes
that the information and assumptions used in preparing the
forward-looking statements are reasonable, undue reliance should
not be placed on these statements, which only apply as of the date
of this news release, and no assurance can be given that such
events will occur in the disclosed times frames or at all. Except
where required by applicable law, the Company disclaims any
intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230404006075/en/
Joe Racanelli Vice President, Investor Relations
info@ElectraBMC.com 1.416.900.3891
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