First Cobalt Corp. has signed a flexible, long-term, offtake agreement with Stratton Metal Resources Ltd for the sale of future cobalt sulfate production from the First Cobalt Refinery located in Ontario, Canada.
- First Cobalt will have the option to sell up to 100% of its annual cobalt sulfate production to Stratton Metals once its refinery is in production. Quantities will be determined by First Cobalt in advance of each calendar year and are subject to a minimum annual quantity.
- Provides flexibility for First Cobalt to enter into offtake contracts with OEMs and their suppliers, reducing amounts made available to Stratton Metals.
- Contract term of five years matches the term of First Cobalt’s feed supply agreements and anticipated term of its credit facility.
- Sale price will be based on prevailing market price at the time of shipment.
This announcement is consistent with the company’s strategy of bringing battery grade cobalt to the North American EV market. The ability to elect the annual quantity sold to Stratton Metals will provide the Company with time and flexibility to advance offtake and battery recycling discussions with potential OEM partners.
“Stratton Metals are among the most knowledgeable cobalt traders in the world, with a network of relationships in every major market”, said Trent Mell, President and Chief Executive Officer. “This sales arrangement is a key milestone for the company as firming up commercial arrangements supports the financing process for the refinery expansion. Refinery commissioning remains on schedule for October 2022. We look forward to working with Stratton to supply the world’s most sustainable cobalt to the electric vehicle market.”
The five-year offtake contract matches the expected term of a project debt facility currently being negotiated as well as long-term arrangements for refinery feedstock. In January 2021, First Cobalt concluded five-year cobalt hydroxide feed purchase arrangements with Glencore AG and IXM SA. The offtake arrangement with Stratton represents a long-term partnership arrangement that will assist First Cobalt as it enters the cobalt sulfate market and qualifies its product with various cathode and battery cell manufacturers. Stratton Metals will be paid a fee relating to the cobalt sulfate sales made under this agreement.
Read the article online at: https://www.globalminingreview.com/mining/31032021/first-cobalt-concludes-long-term-offtake-contract-with-stratton-metals/
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