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ELBM: TSX.V   $0.58 (+3.57%)

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Electra Provides Refinery Update and Files 2023 Financial Reports

Toronto, Ontario – (April 3, 2024) - Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM) (“Electra” or the “Company”) today provided an update on its Refinery project and announced the filing of their full year 2023 financial reports. Electra continues to move ahead with its plans to become the first refiner of battery grade cobalt sulfate in North America by recommissioning and expanding its Refinery, located in Temiskaming Shores, Ontario, Canada. Once commissioned, the facility will produce approximately five percent of the global supply of battery grade cobalt needed for electric vehicles.

“The Electra team progressed our technical programs and achieved a number of successes this year, while being conscientious in our use of capital,” said Electra CEO, Trent Mell. “Most long-lead items are now on site to complete construction, and earlier this year, we announced a $5 million dollar investment from the Government of Canada, showing their continued commitment to building a strong, domestic EV supply chain. Our near-term focus remains on completing the financing package to construct the cobalt sulfate refinery, while building on our technical capabilities.

“Our Black Mass recycling program had repeated successes throughout its more than year-long operation. Recycling is a part of our larger, long-term plan for the battery materials complex and with the work we have put into this arena, we are in a position to add a recycling circuit as the availability of waste and scrap materials grows,” Mr. Mell continued. “We are working closely with the Three Fires Group on a joint venture focused on recycling black mass in Canada from battery manufacturing scrap which could provide a steady source of feed material into the refinery. Following commissioning and the planned ramp-up to 6,500tpa of cobalt in sulfate, along with adding the recycling component, the refinery’s future as an integrated facility will allow Electra to make battery grade material for cell manufacturers from a variety of sources.

“Recently, Canada surpassed China as the world’s most promising jurisdiction for manufacturing lithium-ion batteries, underscoring the strategic value of our refinery for North America,” Mr. Mell concluded. “We have a vision for both the near- and the long-term, and we remain committed to a staged approach, including future plans for a second refinery in Bécancour, Quebec and exploring nickel sulfate refining in North America.”

Highlights and Developments                  

  • Most of the critical equipment such as pressure vessels, tanks, and structural steel needed for completion of the cobalt sulfate refinery, some delayed since 2021, were delivered to the refinery complex in Ontario. Installation of the equipment delivered to the site will occur as Electra secures the remaining capital required for its refinery project.
  • Electra’s cobalt supply agreement with LG Energy Solution was extended and expanded in 2023 and Electra will now supply LG Energy Solution with 19,000 tonnes of battery grade cobalt over a five-year period beginning in 2025.
  • The Company also signed a binding letter of intent in early 2024 with Eurasian Resources Group S.A.R.L. (“ERG”) for long-term supply of ERG’s cobalt hydroxide to the refinery, further supporting efforts to onshore the battery supply chain and reduce reliance on foreign refiners. With this agreement, Electra has sufficient cobalt hydroxide feed material to meet all of the refinery’s annual capacity.
  • Electra successfully completed a year-long plant-scale recycling program of Black Mass material, believed to be the first in North America, and successfully recovered critical metals, including lithium, nickel, cobalt, copper, manganese, and graphite, needed for the EV battery supply chain using Electra’s proprietary hydrometallurgical process.
  • Recovery rates for all targeted metals improved during the trial, and the recovery rates for manganese were improved by more than 50% from results achieved in a lab setting. The metal content contained in the mixed hydroxide precipitate (MHP) produced from the recycling process also increased 5 to 10% over the course of the trial. An increase in metal content results in a higher value saleable product, thereby improving the potential economics of continuous recycling operations. Approximately 28 tonnes of MHP product have been shipped to customers to date.
  • During the fourth quarter of 2023, Electra signed a memorandum of understanding with Rock Tech Lithium for the development of a partnership to supply recycled lithium product from Electra’s refinery to Rock Tech’s lithium refineries for upgrading to battery-grade lithium chemicals. Processing of material is expected to commence in an initial phase beginning in 2026.
  • In early 2023, Electra provided an update on the commissioning and construction of the refinery, including damage during transit to the crystallization circuit and global supply shortages of microchips required throughout the refinery complex resulting in delivery delays of several process control system components. Electra completed a re-baseline engineering report in the second quarter of 2023 focused on the refinery scope, scheduling, and capital expenditures. The re-baseline engineering report estimated that the total capital costs are now at $155 to $167 million, of which approximately $85.6 million had been capitalized as of December 31, 2023.
  • Also in early 2023, Electra signed a memorandum of understanding with the Three Fires Group to form a joint venture focused on the primary recycling (shredding) of battery waste in Ontario, underpinned by Electra’s propriety black mass refining capabilities to recover high value critical metals. Under the joint venture, Electra and the Three Fires will collaborate to source and process battery waste generated by manufacturers of battery cells, electric vehicles, and energy storage systems at a future facility in southern Ontario, to produce black mass material that will be further refined using Electra’s proprietary hydrometallurgical process at its refinery.
  • In the second quarter of 2023, Electra completed a desktop scoping study to evaluate the potential economics of developing a standalone black mass process plant within its refinery complex capable of processing 2,500 tonnes of black mass material per annum. The facility could be scaled over time as the market for battery recycling expands.
  • Electra was notified in September 2023 by The Nasdaq Stock Market LLC (“Nasdaq”) that it did not meet the minimum bid price of US$1.00 per share required for continued listing on the Nasdaq and the Company was given to March 19, 2024, to regain compliance. On March 21, 2024, Electa announced an extension from the Nasdaq to September 16, 2024, to regain compliance.
  • On February 9, 2024, the Company announced that it has received a $5 million investment commitment from the Government of Canada, of which $2 million has been received, towards the construction of North America’s first cobalt sulfate refinery. The investment will be provided in the form of a grant from the Federal Economic Development Initiative for Northern Ontario (FedNor).
  • In February 2023, Electra closed a private placement (the “2023 Note Offering”) of an aggregate of US$51,000 principal amount of 8.99% senior secured convertible notes due February 2028 (the “2028 Notes”). As part of the 2023 Note Offering, the Company purchased and cancelled all outstanding 2026 Notes at par value, plus accrued and unpaid interest. The Company received net proceeds of the 2028 Note Offering of approximately US$13.7 million towards costs associated with the refinery development. Noteholders received an aggregate of 10,796,054 common share purchase warrants (the “2023 Warrants”) exercisable for five years at an exercise price of US$2.48 per common share. In December 2023, Electra announced proposed amendments to the 2023 Warrants and in January 2024, the amendments were agreed upon with the holders to align the terms of the 2023 Warrants more closely with market conditions.
  • The 2023 Warrant exercise price was reduced to CAD$1.00 per common share and an acceleration clause included. As partial consideration for the amendments, the holders of the 2023 Warrants agreed not to exercise certain adjustment provisions they held in connection with the 2028 Notes. As a result, the 2028 Notes were not re-priced at a lower exchange rate and no amendments were made in respect of the debt conversion ratio. The amendments also served to reduce potential dilution in Company capitalization in the event the 2023 Notes are converted into equity, while the cashless exercise feature will serve to concurrently reduce the dilutive effect of future exercises of Warrants upon the occurrence of an acceleration event as defined in the agreement.
  • On February 27, 2024, the Company announced that Electra and the holders of the 2028 Notes had also entered into an agreement, subject to certain conditions, of a postponement of the unpaid August 15, 2023, and February 15, 2024, interest payment dates under the 2023 Note Offering Indenture. Additional details are set out in the 2023 Note Offering and subsequent amendment and Indenture are filed on Sedar+ (sedarplus.com). Following receipt of approval from the TSXV to issue common shares in satisfaction of US$401 of interest payable in accordance with this agreement, on March 21, 2024, the Company issued an aggregate of 843,039 Shares at a deemed issue price of $0.6439 per share.
  • Due to market conditions and the delay to the completion of the refinery project, the Company recorded a non-cash asset impairment charge which is reflected in the fourth quarter and full year 2023 earnings results. Under IFRS, this charge could be reviewed in future periods, as conditions evolve.
  • Period-end cash position of C$7.6 million.

Electra’s current priority is recommissioning and expanding its refinery, and its long-term vision includes additional phases to potentially provide recycled battery materials and battery grade nickel to the North American and global electric vehicle battery market:

  1. Completion of the recommissioning of the refinery to produce at an initial rate of 5,000 tonnes per annum of battery cobalt contained in cobalt sulfate from cobalt hydroxide.
  2. 12-month permit amendment process and expansion of certain circuits to increase cobalt production to 6,500 tonnes per annum of battery grade cobalt sulfate, reaching the nameplate capacity of the crystallization circuit.
  3. Recycling of black mass, recovering lithium, nickel, cobalt and other critical metals, supported by a planned joint venture with the Three Fires Group to collaborate to source and process battery waste for further refining at Electra’s refinery.
  4. Expansion to a second cobalt sulfate facility in Bécancour, Quebec and a strategically located North American nickel sulfate plant.

Electra’s low carbon hydrometallurgical refinery in Canada is permitted and has an estimated current replacement value of approximately US$200 million. The Company requires an additional US$60 million to complete construction. The cobalt refinery project continues to be derisked through the on-site receipt of most long lead-time equipment and by commissioning the legacy refinery operations for the black mass demonstration plant.

The Company’s 2023 financial reports are available on SEDAR+ (www.sedarplus.com) and the Company’s website (www.ElectraBMC.com). Electra will host a conference call on April 4, 2024, at 10:00 am ET to review its fourth quarter performance and discuss near-term outlook.  Dial in, slides, and webcast are all available at www.ElectraBMC.com/category/events/.

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 and a black mass refinery, Electra is executing a multipronged strategy to onshore the electric vehicle supply chain. Keys to its strategy are integrating black mass recycling and nickel sulfate production at Electra’s cobalt refinery located north of Toronto, advancing Iron Creek, its cobalt-copper exploration-stage project in the Idaho Cobalt Belt, and expanding cobalt sulfate processing into Bécancour, Quebec. For more information, please visit www.ElectraBMC.com.


Heather Smiles
Vice President, Investor Relations & Corporate Development

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

This 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”. Such forward-looking statements include, without limitation, statements regarding the potential for additional funding from the Federal government of Canada and the government of Ontario and the quantum and terms thereof, adjustments of interest rates on the occurrence of certain events which may impact the attributes of the notes and warrants issued under the Note offering, including but not limited to a “green bond” designation, and the effective conversion rate of the Notes and Warrants, which is subject to adjustment in certain circumstances. 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. Among the bases for assumptions with respect to the potential for additional government funding are discussions and indications of support from government actors based on certain milestones being achieved. 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.