Impact: Very Positive
Electra announced it plans to increase the design capacity for its Ontario Cobalt Refinery operation by 30%, expanding the production rate from 5,000t to 6,500t Co pa. The budget for the larger circuit has also been increased to US$67M, which is expected to be funded from its treasury. The addition represents an 11.7% increase in total costs to provide 30% of additional product. First production is scheduled for Q4/22. Furthermore, ground excavation has commenced for a new solvent extraction facility and contracts have been awarded for the foundations and building construction. As part of a phased approach to create the only battery materials park in North America, Electa plans to provide automakers with an opportunity to directly access battery-grade nickel and cobalt, which is a recycled battery material and precursor material (read more). In our view, this is positive news as the expansion of the plant at this time should help save on Capex, may reduce costs and not impact production time horizons. The Ontario cobalt refinery represents 91% of our total NAV.