august 2016 - ecobalt.com · battery chemicals superalloys hardmetals ceramics/ pigments catalysts...
TRANSCRIPT
AUGUST 2016
Disclaimer
CONFIDENTIALITY
This Presentation is confidential and the contents are not to be reproduced or distributed to the public or the press. Securities legislation in all provinces and territories prohibits such
unauthorized distribution of information. Each recipient of the information contained in this Presentation will treat such information in a confidential manner and will not, directly or
indirectly, disclose or permit its affiliates or representatives to disclose such information to any other person or reproduce this Presentation in whole or in part, without the prior written
consent of eCobalt Solutions Inc..
NOT FOR U.S. DISTRIBUTION
This Presentation is for use solely in Canada and is not to be provided by any means to anyone in the United States. The securities of eCobalt have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "U.S. Act"), or the securities laws of any state and may not be offered or sold in the United States or to "U.S.
Persons" (as defined in Regulation S of the U.S. Act) unless an exemption from registration is available.
PRELIMINARY ECONOMIC ASSESSMENT (“PEA)
The Company cautions that this PEA is preliminary in nature, and is based on technical and economic assumptions which will be evaluated in further studies. The PEA is based on the
current (as at March 10, 2015) ICP estimated resource model, which consists of material in both the measured/indicated and inferred classifications. Inferred mineral resources are
considered too speculative geologically to have technical and economic considerations applied to them. The current basis of project information is not sufficient to convert the mineral
resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability. Accordingly, there can be no certainty that the results
estimated in the PEA will be realized.
FORWARD-LOOKING INFORMATION
This PEA presentation contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Statements in this PEA presentation pertaining to
projected revenues and cash flows, quantity and grade of mineralized materials, estimated mineral prices and the continued expansion of the market for battery grade cobalt chemicals
are forward-looking statements. These forward-looking statements are based on assumptions and address future events and conditions and are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such
forward-looking statements. Many of the assumptions respecting projected revenue, cash flow and quantity of mineralized materials will be set out in detail in the PEA. Such
projections are and will inevitably always be dependent on assumptions about future mineral prices and development costs which will be subject to fluctuation due to global and local
economic conditions. This PEA presentation also contains forward-looking statements respecting the growing demand for battery grade cobalt chemicals, which demand may or may
not continue to grow depending on consumer habits and technological developments. Further information regarding risks and uncertainties which may cause results to differ from
those contained in forward-looking statements are included in filings by the Company with securities regulatory authorities and are available at www.sedar.com. Although the
Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to
update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.
The statements contained in this PEA presentation in regard to eCobalt Solutions Inc. that are not purely historical are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including eCobalt Solutions Inc.'s beliefs, expectations, hopes or intentions regarding the future. All forward-looking statements are made as of
the date hereof and are based on information available to eCobalt Solutions Inc. as of such date. It is important to note that actual outcome and the actual results could differ from
those in such forward-looking statements. Factors that could cause actual results to differ materially include risks and uncertainties such as technological, legislative, corporate,
commodity price and marketplace changes.
Note: All dollar amounts quoted in the Presentation are in USD unless otherwise noted.
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THIS MANAGEMENT PRESENTATION (THE "PRESENTATION") WAS PREPARED AS A SUMMARY OVERVIEW ONLY OF THE CURRENT AFFAIRS OF ECOBALT SOLUTIONS
INC.(“ECOBALT" OR THE "COMPANY") AND WAS NOT PREPARED FOR THE PURPOSE OF ASSISTING PROSPECTIVE INVESTORS IN MAKING A DECISION TO INVEST IN
ECOBALT. ECOBALT DOES NOT MAKE ANY REPRESENTATION AS TO THE COMPLETENESS, TRUTH OR ACCURACY OF THE INFORMATION CONTAINED IN THIS
PRESENTATION. THE RECIPIENT IS CAUTIONED, THEREFORE, THAT IT IS INAPPROPRIATE TO USE THIS PRESENTATION, OR ANY PORTION THEREOF, TO ASSIST IN MAKING A DECISION TO INVEST IN ECOBALT.
E.R. (Rick) Honsinger, P. Geo., Vice President of the Company is the Qualified Person under NI 43-101 who has reviewed and approved the technical content in this presentation.
Cobalt 49% of demand driven by rechargeable batteries, used primarily in electric
vehicles and portable electronic devices. (11.7% y/y growth)
- Li Ion: LCO, NCM, NCA cathode, NiMH: anode/cathode
Conflict and Child Labour
Growing scrutiny of global supply chain of Cobalt poses public relations
risk for electric vehicle and electronics manufacturers
Pure-play Vast majority of Cobalt production tied directly to primary Nickel and
Copper mines which are under pressure in current market
Deficit Looming
Cobalt supply/demand balance expected to move into deficit territory in
2016
ECS-T Toronto Stock Exchange listed company with a flagship pre-production
primary Cobalt mining project
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A Pure-Play Cobalt Opportunity
eCobalt Solutions Inc. – Corporate Snapshot
Information above is from the Company’s May 18th, 2016 Financial Statements and are expressed in Canadian Dollars. To read the full
financial statements, please visit the Company’s website at www.eCobalt.com or contact Investor Relations at 604-682-6229.
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Shares Issued 105.7 M
Options Outstanding 6.7 M
Warrants Issued 7.9 M
Fully Diluted 120.3 M
Share price of ECS $0.52
52 Week High / Low $0.63 - $0.085
Market Capitalization $55.0 M
Working Capital (as at May31th, 2016) C$1.3 M*
* Closed C$4.4M financing June 1st, 2016
Note: Al figures as at July 18, 2016, unless otherwise noted
eCobalt Solutions Inc. – Management
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Mr. J.Paul Farquharson
B.B.A.
Position: President & CEO, Director
Mr. Farquharson is President and Chief Executive Officer of the Company.
Previously, he was Chief Financial Officer and has been with the Company for
over 23 years. He was integral in the success of numerous financings totaling over
$100M with the Company. He has made valuable contributions to business
development and strategic acquisitions of eCobalt. He possesses extensive in-
house experience with the numerous aspects of the mining industry, including
corporate management, administration, compliance, and capital markets.
Mr. Marc Tran,
CPA, CGA, B.Comm., B.A.
Position: Chief Financial Officer & Corporate Secretary
Prior to being appointed to CFO in January of 2014, Mr. Tran was the Controller
for the Company since October 2011. He has over 12 years of experience in
corporate finance, financial management, and regulatory compliance with public
companies. He has previously served as Director and CFO for other public
companies with projects in mineral exploration, development, and production in
Canada, US, Mexico, Central and South America.
Mr. E.R. (Rick) Honsinger
B.Sc., P.Geo.
Position: Vice President
Mr. Honsinger's geological and technical background brings over 30 years of
project management, exploration and Q.P. related experience to the Company. He
is Senior Vice President overseeing Corporate Development, Communications and
related compliance and has managed and contributed to the success of numerous
field and special projects during his past 20 years with eCobalt Solutions Inc.
eCobalt Solutions Inc. – Board of Directors
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Cecil D. Andrus
Director Emeritus
Governor Andrus is
a previous four-term
Idaho State
Governor, former
U.S. Secretary of
the Interior and
former counsel to
Gallatin Public
Affairs.
David Christie,
P.Geo.
Director
President and CEO of
Eagle Hill Exploration
Corp. and Vice
President with
Goodman & Company,
Investment Counsel
Inc. and Dundee
Resources Limited.
Scott Hean,
B.A., MBA, ICD.D
Director
Member of the Audit and
Chair of the
Compensation Committee
of Sabina Gold & Silver
Corp., former Senior VP
and Managing Director
with the Bank of Montreal,
natural resources sector
financing North America.
Gregory Hahn,
CPG, B.A, M.S.
Director
Over 30 years of mining
industry experience and
currently President of
Canamex Resources .
Former District and Senior
Geologist and Chief Mine
Geologist with Noranda
(Xstrata) on the Blackbird
deposit
Robert J. Quinn,
B.S.B.A., J.D.
Director – Chairman
Founding partner of
mining law firm Quinn
& Brooks LLP, former
Vice President and
General Counsel for
Battle Mountain Gold
Company .
David Stone,
Ph.D., M.B.A., P.E., P.Eng
Director
30 years of engineering and
financial consulting experience
to metal mines worldwide.
Managed and led
multidisciplinary project teams
through pre-feasibility and
feasibility evaluations of development-stage projects.
Robert Metka,
B.Sc., Eng., M.B.A.
Director
23 years of mineral
production and
engineering experience as
V.P. of Projects for
Noranda Minerals and
V.P. and General Manager
of CEZinc. He is presently a Principal of Hatch.
Battery Chemicals
Superalloys
Hardmetals
Ceramics/ Pigments
Catalysts
Hard Facing
Tyres / Paint Driers
Magnets
Others
49% (+11.7%) – 98,200,000 lbs
18% (+3%) – 35,100,000 lbs
8% (-3%) – 16,500,000 lbs
6% (+1%) – 11,400,000 lbs
5% (-8%) – 10,600,000 lbs
4% (+3%) – 7,900,000 lbs
4% (+2%) – 7,900,000 lbs
3% (+4%) – 6,000,000 lbs
3% (-6%) – 5,900,000 lbs
2015 Refined Cobalt Demand (E)
198,700,000 lbs
(+5.4%)
Battery
Chemicals
Rechargeable Batteries: Li Ion (LCO, NCM, NCA
cathode) and NiMH/NiCd
Superalloys Nickel – Cobalt based alloys: Aerospace, land based
turbines, medical and other
Hardmetals Cobalt as a binding material: Cutting tools, mining
and oil and gas drilling, etc.
Ceramics/Pi
gments
Pigment / decolouriser: Ceramics, glass and colouring
applications
Catalysts Cobalt Salts as Precursor for catalysts
Hard Facing For wear solutions: Stellites, Trialloy etc.
Tyres / Paint
Driers
Soaps and Driers: Drying agent and rubber adhesion
promotor
Magnets Permanent magnets: AlNiCo, SmCo, NdFeB, CoFe
Others Various: Electroplating, high speed steel, agriculture,
synthetic diamonds
Cobalt Demand by Application
Source: Darton Commodities Ltd, Jan 2016
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Tesla - $5B Gigafactory
for battery manufacturing
Ford to invest US$4.5B
on13 new EV’s by 2020
Porsche to invest €1B
for EV production
Faraday Future to
invest US$1B to develop
intelligent Electric Vehicles
Source: Umicore Capital Markets Day, Sept 2, 2015 and Darton Commodities Ltd. Jan 2016
Cobalt: Battery Growth Driven by Electric Vehicles
Other Current & Future Auto Manufacturers, that intend to collectively invest billions of dollars
in electric vehicles include:
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Source:: CRU May 2016
DRC & Cobalt Supply
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65% of the world cobalt supply mined from DRC
Cobalt produced primarily a by-product of nickel and copper mining (60% copper, 38% nickel production)
Over 10% cobalt offline resulting from closures due to weak Cu and Ni prices:
Glencore/Katanga Mining (10% of global cobalt metal supply)
OTHERS: Votorantim, ERG/Chambishi, Norilsk Nickel, and Queensland Nickel
Artisanal mining accounts for 22% of total cobalt production from the DRC
Amnesty International exposes abuses of the human rights related to artisanal mining likely leading to
future reductions in artisanal supply
All of the above have lead to cobalt shortfalls in supply, especially for cobalt chemicals used in EV sector
Cobalt demand growth (5.4%) outpaced supply growth (2.4%) reducing surplus
Supply/demand balance expected to move into deficit territory in 2016
Metal market balance to tighten in 2016 - output is scheduled to fall at least 11% from 2015 - by 3,3750MT
Cobalt: Supply/Demand Balance
2007-2015 CAGR: Demand 5.6%, Supply 6.7% 2014-2018 CGAR: Demand 5.5%, Supply 2.8%
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Surplus Deficit
2007-2015 CAGR: Demand 5.6%, Supply 6.7% 2014-2018 CGAR: Demand 5.5%, Supply 2.8%
Source: Darton Commodities Ltd, Jan 2016
Source: After CRU May 2016
Results of Cobalt Supply Demand Imbalance
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Expected improved prices in CRU’s base-case scenario
Project Summary
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Project Located in Idaho, U.S.A. – Increased
Focus on Ethical Sourcing of Cobalt
Cobalt Sulphate Product Sold directly into
High-Growth Battery Market
Environmental Permits in Hand
C$110M in Expenditures to Date
Resource Upside, Open at Depth
Idaho Cobalt
Project (ICP)
Completed Bankable Feasibility (2007) for high purity cobalt metal1
All critical permits in place, with an approved mine Plan of Operations
Preliminary Economic Assessment for cobalt sulfate production for battery sector completed
(March 2015)
Feasibility level metallurgical work completed demonstrating successful production of high
purity cobalt sulfate heptahydrate crystals (February 2016 )
Idaho Cobalt Project: Advanced Development
ICP Mine Site
Proposed CPF
Tesla Gigafactory
Tesla Final Assembly
ICP Mine Site – Earthworks 90% Complete
Idaho Cobalt Project (“ICP”)
Mine & Mill Facility, Salmon, Idaho
In excess of C$110 M including exploration, development, permitting and construction
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1Investors are cautioned that previously SEDAR filed Pre-Feasibility Study and Feasibility study can not be relied upon as a number of critical assumptions are out of date. Please refer to the October 1, 2014 news release.
Cobalt Production Facility (“CPF”)
Trade-off studies underway on location
Project History
ICP – Additional Advantages
Environmentally Sound
Underground Project Design - Small Environmental Footprint
100% Reclaimable - Modest 135 Acre Disturbance
No Tailings Pond - Dry Stacked Tailings
Conservation Act Program (“CAP”) - J/V with Idaho Conservation League – to promote
remediation of water shed area for fish habitat in Lemhi County, Idaho
Mine Plan of Operations - Approved
ICP offers a unique potential for consumers to secure an ethically sourced, environmentally sound
supply of battery grade cobalt chemicals, mined safely and responsibly in the United States
Ethically Sourced
Apple, Samsung and Sony face child labour claims
19 January 2016 http://www.bbc.com/news/technology-35311456
Human rights organisation Amnesty has accused Apple, Samsung and Sony, among others, of failing to do basic checks to ensure minerals used in their products are not mined by children. In a report into cobalt mining in the Democratic Republic of the Congo, it found children as young as seven working in dangerous conditions.
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PEA Revenue by Product
PEA Highlights
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Initial Capital Requirements Cost (USD$M)
Mine (with 10% Contingency) 30.01
Mill (with 15% Contingency) 43.52
CPF (with 20% Contingency) 69.42
Initial Net Working Capital 3.81
Total Initial Capital 146.76
Mine Development Cost During Production 26.9
Sustaining Capital 27.75
Total LOM Capital 201.41
PEA Cash Costs and NPV Sensitivity
LOM Total Cash Costs of processed cobalt: $13.25/lb.
LOM Total Cash Costs of processed cobalt net of by-product credits: US$4.94/lb.
LOM Total Cash Production
Cost/lb Processed Cobalt ($)
LOM Total Cash Production
Cost/ton ($)
LOM Total Cash
Production Cost ($M)
Percentage of
Total Cost (%)
Mining 6.22 63.58 219.88 46.9
Mill 2.14 21.93 75.83 16.2
CPF 2.59 26.49 91.61 19.5
General & Administrative 2.3 23.54 81.4 17.4
LOM Cash Production Cost 13.25 135.53 468.72 100
Less By-Product Production Credits ( 8.31) ( 84.98) ( 293.14)
LOM Net Cash Production Cost 4.94 50.55 175.58
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Cobalt Sulfate Heptahydrate ($/lb. Contained) $14.50 $17.00 $19.50 $22.00 $24.50
Post-tax NPV $25.94 $68.06 $113.45 $157.59 $202.23
Post-tax IRR 12.35% 18.19% 24.07% 29.51% 34.88%
Post Tax NPV (discounted at 8.5%) and IRR Sensitivities to Price
PEA Cash Costs and NPV Sensitivity
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NPV Sensitivity
Class Cut-off (%Co) tons %Co Lbs. Co %Cu Lbs. Cu oz. Au/ton oz. Au
Measured 0.2 2,266,000 0.54 24,587,000 0.71 32,123,000 0.016 35,600
Indicated 0.2 1,214,000 0.58 13,996,000 0.82 19,839,000 0.018 22,100
M + I 0.2 3,480,000 0.55 38,583,000 0.75 51,962,000 0.017 57,700
Inferred 0.2 1,675,000 0.47 15,648,000 0.71 23,753,000 0.013 21,900
Resource Summary (Prepared in accordance with NI 43-101)
Resource Summary and Growth Potential
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Resource Growth Potential
Mineralization open at depth along one strike direction
+12 additional targets
4 drill tested with several intercepts exceeding current cut-off grades
Mineral resources that are not mineral reserves do not have demonstrated economic viability
Successful Feasibility Level Metallurgical Work
Formation has demonstrated it can successfully produce high purity, battery grade cobalt
sulfate from ICP ore
Source: eCobalt Solutions Inc.’s News Release, Dec 8th, 2015
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March 2015 - PEA completed on proposed flowsheet,- SEDAR filed May 2015
July - August 2015 - Flotation tests finalized, final flow sheet determined, Leaching
successfully produced Pregnant Leach Solution (PLS) as per the existing PEA flow
sheet
October 2015 - Cobalt Solvent Extraction (SX) was piloted and successfully produced
the required cobalt PLS
November 2015 - Cobalt Sulfate Heptahydrate crystals successfully produced at
desired battery grade specifications
February 2016 - Bench tests of Cytec Industries Inc.'s solution reagents and General
Electric crystallizers were successful
Moving Forward
Objective – recommence construction in
2017*
Raised $4.4M for feasibility study – June, 2016
Feasibility study initiated – June, 2016
Feasibility study released Q4/16-
Q1/17
Identifying Strategic Partners – off-
take, streaming, construction financing
Idaho Cobalt
Project (ICP)
Disclaimer: Times are estimates and can change without notice, construction dependant on successful BFS & Capex financing
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Idaho
Cobalt
Project
Unique Primary Source of Cobalt
- USA is the number one cobalt
consumer with no domestic supply
Strong Cobalt Demand
Fundamentals
- Fueled primarily by
expanding
rechargeable battery use
Long-term Offtake Partners Sought
- Security of supply makes offtakes
with eCobalt appealing
- Potential source of project financing
Small Environmental Footprint
Environmental permits in hand
135 acres
Dry stack tailings
Clean water discharge
Resource Upside
- Upside as resource
open at depth
- Potential to extend
12.5 year PEA mine
life
Conclusions
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Paul Farquharson, B.B.A.
President & CEO
Marc Tran, CPA, CGA, B.Comm., B.A.
CFO & Corporate Secretary
Rick Honsinger, P.Geo., B.Sc.
Vice President
CONTACT INFORMATION
eCobalt Solutions Inc. Tel: +1 (604) 682-6229
1810 – 999 West Hastings St. Email: [email protected]
Vancouver, B.C., Canada, V6C 2W2 Web: www.eCobalt.com
eCobalt Solutions Inc. (ECS.TSX) has strategically positioned itself to offer its shareholders North
America’s only primary cobalt deposit - an advanced staged, environmentally conscious opportunity that
can be rapidly advanced towards production upon the successful conclusion of mine financing.
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