Electra Announces $20 Million Strategic Investment Proposal
10 September 2024 - 9:30PM
Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V:
ELBM) (“
Electra” or the
“
Company”) today provided an update on its
financing strategy for North America’s first battery grade cobalt
refinery, announcing that it has received a non-binding term sheet
for a $20 million prepayment facility from an arms-length strategic
player in the battery materials sector. Several other financing
discussions have been advancing alongside this proposal to raise
the $60 million for project completion plus amounts for working
capital and operations during the construction and commissioning
phases.
Electra CEO, Trent Mell, commented, "Interest
from sophisticated strategic partners indicates strong confidence
in Electra, and with the continued support of investors,
governments and downstream customers, we are well-positioned to
realize our vision of a North American battery materials supply
chain."
The strategic investment announced today is
equal to the $20 million award Electra received from the U.S.
Department of Defense pursuant to Title III of the Defense
Production Act (DPA) last month. More than 90% of battery grade
cobalt is produced by Chinese companies today, and none in North
America.
Electra owns a low carbon, permitted
hydrometallurgical refining complex north of Toronto that
historically produced nickel and cobalt. The facility is being
expanded and modified to provide North America battery makers with
a domestic source of cobalt sulfate for lithium-ion batteries. The
refining complex was also the location of a year-long battery
recycling demonstration plant in 2023. The Company estimates that
an additional $60 million in capital costs are required to complete
the $250 million cobalt facility.
If consummated, the investment would be
comprised of an immediate investment of $10 million and a follow-on
investment of $10 million during the refinery’s commissioning
phase. As partial compensation, Electra would provide marketing
rights for a portion of future production until the facility is
repaid. This investment is intended to provide working capital and
general and administrative coverage over and above the remaining
construction costs. The transaction is subject to conditions
precedent, including developments in parallel financing discussions
that are well advanced.
Electra continues to make steady progress in
securing other non-dilutive sources of financing, including
government programs, to complete the construction and commissioning
of the refinery. Once fully commissioned, Electra’s facility could
produce up to 6,500 tonnes of cobalt per year, which could support
the production of over 1 million EVs annually. LG Energy Solution
intends to purchase up to 80% of capacity over the first five years
of operation.
At this time, the strategic investment term
sheet is a non-binding proposal, and a confirmation of the proposal
was received on September 3, 2024. The progression to binding
documentation is subject to finalization of diligence and
negotiation of customary closing materials and is progressing in
line with all parties’ agreed timeline. Discussions with other
strategic partners are expected to continue until today’s proposal
becomes binding.
Electra’s near-term priority is to recommission
and expand its low carbon Canadian cobalt refinery, which has
already been derisked through the delivery of long lead equipment
and the operation of a black mass demonstration plant in the legacy
refinery. The Company’s longer-term vision includes nickel
production and battery recycling, thereby onshoring additional
critical mineral refining processes needed for the North American
electric vehicle battery supply chain.
Company Update
The Company also announces that in accordance
with its Long-Term Incentive Plan approved by shareholders at its
August 13, 2024 annual general meeting, it has granted an aggregate
of C$96,250 in deferred share units (DSUs) in connection with
Directors remuneration, which is issued in lieu of cash
compensation otherwise payable. DSUs vest after twelve months but
may not be exercised until a Director ceases to serve the Company.
DSU grants ensure alignment of interests with the Company’s
shareholders.
About Electra Battery
Materials
Electra is a processor of low-carbon,
ethically-sourced battery materials. Currently focused on
developing North America’s only cobalt sulfate refinery, Electra is
executing a phased strategy to onshore the electric vehicle supply
chain and provide a North American solution for EV battery
materials refining. In addition to building North America’s only
cobalt sulfate refinery, its strategy includes integrating black
mass recycling, potential cobalt sulfate processing in Bécancour,
Quebec, and exploring nickel sulfate production potential within
North America. For more information, please visit
www.ElectraBMC.com.
Contacts
Heather SmilesVice President, Investor Relations & Corporate
Development Electra Battery Materialsinfo@ElectraBMC.com
1.416.900.3891
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adequacy or accuracy of this release.
Cautionary Note Regarding
Forward-Looking StatementsThis 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”. 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. 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.sedarplus.com and with on EDGAR at www.sec.gov. Other factors
that could lead 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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