TSX-listed eCobalt Solutions has announced cost control measures to preserve its treasury, until the cobalt market recovers sufficiently to raise the necessary funding required for the advanced-stage Idaho cobalt project (ICP) in the US.
The company will be reducing its overhead costs so that its resources will focus on critical path items, including securing offtake and finalising a new feasibility study for the previously announced 1 200 t/d mine plan, the mining company said on Wednesday.
An oversupply of product from the Democratic Republic of Congo has pushed down the price by 50% since mid-2018. The near-term price weakness is having a ripple effect on the capital markets, eCobalt noted.
The company said it would restart project development when full project financing was secured.
Once a production decision has been reached, the timeline to production would be 18 months. Under a previous plan, the IPC was expected to reach commercial production in the first half of next year.
The ICP underground mine would produce 31.77-million pounds of cobalt, 42.82-million pounds of copper and 32 241 oz of gold over a 12.5-year mine life.
The workforce would be reduced to only those employees essential for completing critical path items and ongoing activities at site.
“We will now continue to build on this progress with our focus on securing offtake, which will define final concentrate specifications and allow us to complete the work needed to finalise the new feasibility study. Once an economic feasibility study is produced and project financing is secured, we intend to fast-track project development to bring the ICP into production for the benefit of our communities and all stakeholders,” stated eCobalt president and CEO Michael Callahan.
eCobalt expressed its confidence in the long-term outlook for cobalt, noting that demand was expected to more than triple by 2030, driven by a global shift towards electrification.
"These measures are being imposed in line with our objective to safeguard the future of the company," added Callahan. "We are confident that the price for cobalt will strengthen in the coming years and, with the work we are doing now, we intend to be in a position to capitalise on higher price environments once they return, creating a transparent and ethical supply of cobalt for the growing market."
eCobalt’s shares traded 2.17% lower on Wednesday at C$0.43 apiece – a 52-week low.