Fuse Cobalt (TSXV:FUSE) announced that it has reached an agreement in principle (AIP) as a first step toward supplying cobalt raw material to Electra Battery Materials in Canada.
The non-binding MoU, which was signed by Fuse Cobalt and the Electra-owned cobalt sulfate plant in Temiskaming Shores, Ontario, will see Fuse Cobalt provide the raw material for the operation.
The transaction is contingent on the two firms signing a final agreement, which will be subject to Fuse satisfying certain conditions. There are several items that must be addressed in order to produce cobalt material suitable for further processing to battery-grade cobalt sulphate at Electra’s refinery, as well as the completion of a bankable feasibility study.
The cobalt raw material will most likely come from one of Teledyne or Glencore Bucke’s Ontario discovery operations, which are both located near Electra’s cobalt plant.
The MoU is also expected to set the groundwork for future transactions between the two Canadian firms. Electra will purchase up to two kilo-tonnes per year (KTA) of raw cobalt material from Fuse Cobalt’s “Glencore Bucke” and/or “Teledyne” operations for its cobalt camp refinery. The two companies might also work together to explore means of extracting copper by-products on a profit-sharing basis.
Fuse CEO Robert Setter commented in a press release: “This MOU is the first step towards a potential Definitive Agreement to supply cobalt raw material for Electra’s nearby cobalt refinery and sets out the terms by which we will exchange information with Electra to advance a potential transaction involving the supply of cobalt raw materials. The end result of this collaboration will be the execution of a Definitive Agreement to provide cobalt feedstock to the Electra Cobalt Refinery, which is roughly a stone’s throw away from our two cobalt exploration properties in Ontario.”
Electra CEO Trent Mell commented in the press release: “Having a domestic source of cobalt raw material produced ethically and with low-carbon emissions will help us to better address the demand for onshore EV battery materials.”
In a statement, Fuse Cobalt also commented: “The transaction is expected to provide a ‘Made in North America’, low greenhouse gas emissions cobalt sulfate solution, capable of supplying the continent’s growing lithium-ion battery supply capacity.”