First Cobalt estimates 13% reduction in operating costs for Canadian cobalt refinery project

First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) said it now estimates that the operating cost for its permitted cobalt refinery in Ontario, Canada, will be $2.36 per pound of cobalt, a 13% reduction that it says improves refinery margins, enhances project economics and further solidifies the refinery’s global competitiveness. In an update on ongoing engineering studies at the project, the company said the estimated cost reduction will result in around $4 million of increased annual pre-tax cash flow compared to the May 4 engineering study, which estimated that the refinery could produce 5,000 tonnes of cobalt per year, resulting in 25,000 tonnes of cobalt sulfate product for electric vehicle (EV) batteries. READ: First Cobalt says cobalt will remain a key component of electric vehicle batteries after Tesla's Battery Day announcement First Cobalt also provided and updated capital estimate of $60 million compared to $56 million in the original engineering study, as well as forecasting $41 million in undiscounted pre-tax free cash flow to the project during the first full year of production. The company added that it has established a joint technical committee with Glencore PLC (LON:GLEN) to continue to work on further technical and cost enhancements to the refinery, while final permit amendments and a closure plan are on track to be submitted before the end of the year. A financing process has also moved into phase two and the firm is assessing several third-party financing proposals as discussions continue to advance with the private sector and government agencies. “The latest engineering work reinforces the value of the First Cobalt Refinery and the long-term value proposition for investors. With a competitive operating cost structure and improved cash flows, the Refinery clearly establishes itself as an important component of the growing North American electric vehicle supply chain,” the company said. "The Joint Technical Committee recently formed with Glencore has supported our ongoing work on refinery trade-off studies and identified new opportunities that First Cobalt is now studying. We continue to work on a commercial contract while we pursue additional project optimization work with a global team of engineers and operators that has presented opportunities to First Cobalt to deliver improved project economics,” First Cobalt president and chief executive Trent Mell said in a statement. “Our goal is to commission a world-class, globally competitive refinery for the European and North American EV markets and it is imperative that we look at every opportunity to ensure our success," he added. Contact the author at calum@proactiveinvestors.com Follow him on Twitter @Cal_Proac