Financial Data and Key Metrics Changes - The company raised CAD 21.5 million in gross proceeds from two concurrent private placements, emphasizing strong market support despite economic uncertainty [14][15] - Cash and marketable securities decreased from CAD 12.8 million at the end of Q1 to CAD 7.4 million at the end of Q2, primarily due to capital costs related to the refinery construction and black mass trial [17] - The construction budget for the cobalt sulfate refinery is estimated at CAD 104 million, with a midpoint of CAD 161 million for completion [29] Business Line Data and Key Metrics Changes - The company completed a scoping study indicating compelling project economics for processing 2,500 tonnes of recycled material per year, with an estimated cost of CAD 8.1 million for the black mass operation and a return rate exceeding 120% [19][20] - The black mass trial has shown promising recovery rates, with the first commercial shipment of mixed hydroxide precipitate (MHP) completed [32] Market Data and Key Metrics Changes - The company signed an MOU with Three Fires for battery recycling in Ontario, which is expected to enhance the supply chain for electric vehicle (EV) materials [16][40] - The extension of the supply agreement with LG Energy Solution increased the supply from 7,000 tons to 19,000 tons over five years, indicating strong demand for cobalt sulfate [37] Company Strategy and Development Direction - The company is focusing on strengthening its balance sheet and managing liquidity, with staffing reductions and cost management measures implemented [28][44] - The strategy includes accelerating the black mass recycling initiative while securing capital for the cobalt recycling plant, aiming for a sustainable supply chain for EV materials [20][70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by supply chain issues and inflation but expressed optimism about the strong support from investors and the potential for future growth [18][44] - The company anticipates a challenging year in 2023 due to economic uncertainties and commodity price volatility, but is taking steps to mitigate these impacts [44] Other Important Information - The company is exploring partnerships and funding solutions to address the capital shortfall for the cobalt sulfate refinery, with a focus on government and commercial partnerships [30][85] - The black mass recycling initiative is expected to ramp up to a processing rate of 2,500 tonnes per annum within 12 months of being fully funded [110] Q&A Session Summary Question: How does Ford's investment in Bécancour impact your plans? - Management noted that the investment is significant and aligns with their strategy to strengthen the North American supply chain for EV materials [105] Question: Can you clarify the CapEx needed for black mass recycling versus cobalt hydroxide? - The average CapEx for the cobalt sulfate plant is CAD 161 million, while CAD 8 million is allocated for black mass recycling, with many expenditures being complementary [53] Question: What is the timeline for ramping up black mass recycling? - The ramp-up to 2,500 tonnes per annum is expected to take about three to four months after commissioning, with a target to start in October of the following year [110] Question: What are the current plans for Iron Creek? - Management indicated that Iron Creek remains a valuable asset, but the focus is on refining operations rather than mining, with potential partnerships being considered [51] Question: How will the Three Fires relationship enhance your business model? - The partnership is expected to strengthen the black mass strategy and provide a more stable supply chain for EV materials [106]
Electra Battery Materials (ELBM) - 2023 Q2 - Earnings Call Transcript