NEW YORK Formation Metals Inc. has not yet secured
funding to complete its Idaho cobalt project, pushing back a
projected third-quarter 2013 start-up date.
Its obviously pushed things out for us with regards
to starting production, a spokesman told
However, he added that a 2013 start-up of the project, which
consists of a mine, a concentrator and a nearby electrowinning
cobalt production facility that the company is retrofitting,
was still a possibility.
We could still get this into production sometime in 2013.
If we close the financing in February nine to 10 months into
that (year) youre still in November or December in
2013, he said. It is also conceivable that it could
go into 2014 as well. It depends at what point the financing is
The companys decision in May to also process third-party
copper and silver concentrates at the refinery has played a
role in the delay.
The decision ... has required some engineering design
modifications, and this in turn has required additional reviews
from potential lenders engineering teams, which of course
all takes time, chief executive officer Mari-Ann Green
said in a statement Wednesday.
The delay comes also as Formation wants to be sure it can
complete the projected 1,525-ton-per-year project once
construction activities begin in earnest.
We want to be certain we have the adequate funds,
the spokesman said.
The company is pursuing a number of options with regard to
financing, with a bond issue and an alliance with a strategic
partner likely at this point, the spokesman said.
An offtake agreement is not on the front burner due
to the currently low cobalt prices, he added.
Low-grade cobalt is trading between $10.30 and $11.80 per
pound, down from between $10.50 and $10.80 per pound
previously, while high-grade cobalt is between $10.65 and
$12.30 per pound from between $11 and $12.65 per pound
previously, according to AMM sister publication
While there is a lot of interest in the companys project,
the financing environment at the moment isnt in its
favor, with the financial industry being very risk averse
and very cautious, according to the spokesman.