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 AMM.
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 secured.
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 Metal Bulletin.
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.