Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V:
ELBM) (“Electra” or the “Company”) today reported its financial
results for the first quarter ended March 31, 2023, 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.
“Our performance in the first quarter was marked by a number of
significant milestones relating to our lithium-ion battery material
recycling trial,” said Trent Mell, Electra’s CEO. “Most notably, we
completed the first plant-scale recycling of black mass material in
North America and we produced high quality lithium-carbonate,
graphite, and nickel-cobalt mixed hydroxide products that met or
exceeded standards we achieved previously in a lab-setting.
“We expect to sustain this momentum with the first delivery of
recycled products to customers in the coming weeks and the
completion of a scoping study assessing the economic potential of
black mass processing at our refinery complex north of Toronto,”
Mr. Mell concluded.
ELECTRA Q1 2023 HIGHLIGHTS AND DEVELOPMENTS
- Net loss for the period was $21.8 million or $0.61 per share.
Included in the net loss was the impact of a debt offering
transaction completed in the period involving a non-cash settlement
of 2026 Notes in exchange for 2028 Notes at a loss of $19.9
million. Results for Q1 2023 compare to net income of $2.3 million
or $0.08 per share for Q1 2022, which was driven by a gain of $4
million on the fair value of the embedded derivative liability
portion of Electra’s convertible debt.
- Held cash and marketable securities of $12.9 million as at
March 31, 2023, up from $8.4 million as at December 31, 2022.
Electra’s cash balance at the end of Q1 2023 does not include the
remaining $5.1 million of government investments expected to be
received.
- 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,
graphite, and lithium carbonate products in its black mass
recycling trial at its refinery complex.
- Disposed of 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 gross proceeds of the Note Offering of US$15
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.
- Released an updated mineral resources estimate (“MRE”) for the
Iron Creek Cobalt-Copper project located in Idaho.
Highlights Subsequent to Quarter End
- Signed a memorandum of understanding with the Three Fires Group
to a form a joint venture focused on the recycling of lithium-ion
battery waste in Ontario underpinned by Electra’s proprietary black
mass processing capabilities that recover high value elements,
including lithium, nickel, cobalt, and graphite.
- Progressed with the Company’s black mass recycling trial, which
continues to be marked by strong recovery rates and the production
of high-quality products.
Refinery Project Update
As at March 31, 2023 Electra 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 the erection of the solvent extraction building.
- Completed the construction of the cobalt sulfate loadout
facility.
On February 14, 2023 Electra announced that due in part 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 has been undertaken by the refinery
project’s engineering, procurement, and construction management
(EPCM) contractor. Management anticipates that the capital costs
will be higher due to inflation, construction delays, scope
expansion, 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, piping, and freight, 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 (US$78.5
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 expects to provide an update on its refinery project in
the coming days pending completion of the re-baseline engineering
report.
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
high-quality 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.
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 May 11, 2023 at 8:00 am
ET to review its first 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230510005990/en/
Joe Racanelli Vice President, Investor Relations
info@ElectraBMC.com 1.416.900.3891
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