Building North America's Next Primary Cobalt Mine

Idaho Cobalt Project

Project Overview

The Idaho Cobalt Project (“ICP”) is eCobalt’s flagship primary cobalt deposit located in the mining friendly state of Idaho, near the town of Salmon. Over the course of the last 20 years, the Company has invested over $135 million developing the project, which is fully environmentally permitted with proven mineable reserves of cobalt and secondary copper and gold. The ICP is 100% owned through the Company’s wholly owned subsidiary, Formation Capital Corporation, U.S. The ICP is located in the heart of the Idaho Cobalt Belt, a unique mineral rich, prolific metallogenic district unique to North America, which historically produced ~2M tonnes of cobalt from the early 1900s to the 1960s.

The market for cobalt is projected to grow at a CAGR of 7.7% over the next 5 years due primarily to growing demand for electric vehicles. Every major car manufacturer has announced plans for electrification in response to governments across the globe imposing bans on the sale of internal combustion engines. At the same time, consumers are demanding more environmentally sustainable technologies and more ethical practices. With over 60% of the world's cobalt coming from the Democratic Republic of the Congo ("DRC") in West Africa, this creates a critical need to tap into resources that are transparently sourced and supplied – cobalt resources like the ICP’s.

The cobalt price has fallen more than fifty percent since mid 2018 due to a current oversupply of product on the market resulting from excess cobalt production coming out of the DRC and refined supply from China. While the long-term fundamentals for cobalt remain very strong, forecast prices for the near term have dropped as a result of this oversupply. In light of this near-term price weakness and its rippling effect on the capital markets, the Company has announced company-wide cost control measures to preserve its treasury by reducing total overhead costs so that it can focus its resources on the next stage of development. These critical path items include securing off-take and finalizing the new feasibility study.

eCobalt is the only near-term primary cobalt producer in the US. eCobalt remains committed bringing the Idaho Cobalt Project into production for the benefit of its community and all stakeholders. The Company is taking necessary steps so that it can deliver on this once a more favourable cobalt price environment returns. eCobalt is confident that the price for cobalt will strengthen in the coming years and it intends to be in a position to capitalize on higher price environments once they return, creating a transparent and ethical supply of cobalt for the growing market.


Location

The Idaho Cobalt Project consists of 243 contiguous unpatented lode mining claims located in east central Idaho, approximately 25.8 mi (41.5 km) west of the town of Salmon within the historic Idaho Cobalt Belt. Previously known as a mining community, Salmon was an area of past mining activities for Noranda’s former Blackbird mine and Meridian Gold’s former Beartrack gold mine. The Idaho Cobalt Project is located in the Salmon River Mountains of central Idaho, within the Northern Rocky Mountain physiographic province. The project area contains flat-topped mountains and moderate to steep V-shaped canyons, and covers an area ranging in elevation from 6,100 ft. to 8,100 ft. Vehicle access to the ICP is via a series of well-maintained, public-access gravel roads.


Geology & Mineralization

The ICP is centered within the Idaho Cobalt Belt – a unique example of sea-floor hydrothermal brines that vented along an ancient rift within a deep-water setting, providing for an interesting and distinctive geochemistry. The Idaho Cobalt Belt is a northwest-trending zone of Co-Cu-Au occurrences, at least 64 km long and up to 10 km wide. It is an exceptional metallogenic province in which cobalt occurs in sufficiently high concentrations to make it the primary metal in the deposits.

The deposits are mostly strata-bound and appear to have formed during a mafic volcanogenic-exhalative mineralizing event on a paleo-sea-floor ca1600 million years ago. More recent regional metamorphic events have remobilized Cu and, to a lesser extent, Co in varying degrees throughout the belt. The deposits are unusually rich in Co, Cu, Fe, As, Au, B, Bi and light rare earths, but low in Ni (relative to Co), Ag, Pb, and Zn. The synsedimentary controls, mineralogy and geochemistry are unusual among ore deposits, though similar features in some other deposits are known. Sediment-hosted deposits are major ore producers in the world, but unlike the Idaho Cobalt Belt, most tend to be Pb and Zn rich.Some sediment-hosted deposits that contain Cu also contain Co - notably, the deposits of the Katanga province of the Democratic Republic of the Congo and the adjoining Zambian Copperbelt deposits. Significant differences exist between deposits in West Africa and the Idaho Cobalt Belt, whereas many intriguing similarities are found between Idaho Cobalt Beltdeposits and Sullivan, Canada, and Mount Isa and Broken Hill, Australia.

The Idaho Cobalt Belt is currently known to host several Co-Cu deposits within various sequences of metamorphosed, mafic volcanoclastic rocks.

Mineralization at the ICP is closely associated with the mafic sequences of the middle unit of the Apple Creek Formation. Dominant ore minerals include cobaltite (CoAsS) and chalcopyrite (CuFeS2), with lesser, variable occurrences of gold. Other minerals present in small quantities are pyrite (FeS2), pyrrhotite (FeS), arsenopyrite (FeAsS), linnaeite ((Co Ni)3S4), loellingite (FeAs2), safflorite (CoFeAs2), enargite (Cu3AsS4) and marcasite (FeS2).


Operations & Infrastructure

The operations office for the ICP is located in the town of Salmon, where the Company’s subsidiary Formation Capital owns two office buildings housing administrative, field, operational and management personnel, as well as several owned or leased warehouses and laydown yards.

Following a very busy and productive spring and summer season, pre-construction activities were halted for the winter. Progress highlights include:

  • Electrification of the pumpback system is complete; water treatment pipelines are in place and secured for the winter season.
  • The Water Management Ponds are completed and the wildlife fence has been installed.
  • The liner of the Tailings Waste Storage Facility ("TWSF") is 33% complete and the drain pipe has been installed. The completed portion of the TWSF is available to accept waste rock. A protective covering will be finalized in preparation for winter and the liner will be completed in the spring.
  • The Water Treatment Plant ("WTP") construction continues inside the recently completed WTP building. Mechanical completion is expected at the end of November. Commissioning is expected to be completed next year in conjunction with the pumpback system in preparation for the commencement of underground operations.
  • Mill foundations are in progress and are approximately 40% complete.
  • Potable water and power systems are installed and functioning.
  • Phase 1 of the Portal Bench is under construction and is scheduled for completion this year.
  • The maintenance building is in place and functional.

Updates can be found in our News section.

ICP Site Overview - October 2018

ICP Site Overview - October 2018



Resources & Reserves

2017 Ram Deposit Resource Estimate (0.20% Co cut-off) (3)(4)

Category

Resource

Co (%)

Co

Cu (%)

Cu

Au (oz/t)

Au

(M tons)

(M lbs)

(M lbs)

(oz)

Measured(1)

1.73

0.54

18.6

0.76

26.3

0.014

24,300

Indicated(1)

1.71

0.64

22.0

0.71

24.1

0.017

29,900

M+I

3.44

0.59

40.6

0.73

50.4

0.016

54,200

Inferred(2)

1.54

0.51

15.6

0.68

21.0

0.012

18,700

  1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The Mineral Resources in this news release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
  2. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature. There has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
  3. The Cobalt cut-off grade for inclusion in the resource is 0.20%, no consideration of copper or gold content was used in determination of cut-off grade.
  4. Contained metal figures and totals may differ due to rounding of figures


2017 Ram Deposit Mineral Reserves (0.25% Co Cut-off)

Category

Zone

Co%

Cut-off

Resource

(Tons)

Co (%)

Co
(lbs)

Au (opt)

Au
(ounces)

Cu (%)

Cu
(lbs)

Proven

3021, 3022, 3023

0.25

1,987,209

0.43

17,107,067

0.013

25,276

0.69

27,383,521

Probable

3021, 3022, 3023

0.25

1,674,685

0.52

17,409,858

0.017

28,010

0.67

22,372,024

Total Reserve

3021, 3022, 3023

0.25

3,661,894

0.47

34,516,925

0.016

53,286

0.68

49,755,545

  1. The Qualified Person (Q.P.) for the Mineral Resource estimate is Charley Murahwi, P.Geo., FAusIMM.The Qualified Person for the Mineral Reserve estimate is Bernard Foo, P.Eng, M.Eng., MBA.Both Q.P.’s are members of the association of Professional Engineers in Ontario and are employees of Micon International Limited.
  2. Mineral Reserves have an effective date of September 27, 2017. All Mineral Reserves are Proven and Probable Mineral Reserves.
  3. Cobalt cutoff grades were 0.20% for the Resource estimate and 0.25% for the reserve estimate.
  4. Micon updated the estimate of cobalt, copper, and gold resources in a three-dimensional resource wire frame and block model and were used for mine planning, design, and scheduling as part of the Feasibilituy Study Report dated November 10, 2017 and filed on SEDAR.
  5. Micon utilized the previously estimated resources for the Ram deposit (completed by Mine Development Associates for the PEA) supported by their own geostatistical model and reserve criteria
  6. There is approximately 34% dilution forecasted in the stope designs with additional dilution applied, by mining method and stope conditions, for over-break.
  7. The copper and gold resources and reserves are those resources and reserves carried within the stope blocks which attain the cobalt cut-off grade.
  8. No metal value is given to the copper or gold in determining the cobalt resource cut-off.
  9. No metal recoveries are applied, as this is an in-situ resource.
  10. Rounding as required by reporting guidelines may result in summation differences.


Results of an updated resource model were announced on February 7, 2018 based on results from a three-hole, 5,000 foot drill program completed in 2017, and the creation of a new three-dimensional resource model using current state of practice software and geostatistical tools. Compared to the 2017 Resource Estimate the total Measured and Indicated resources increased to 3.87 million tons at 0.59% Co, compared to 3.44 million tons at 0.59% Co and Inferred resources increased to 1.82 million tons at 0.46% Co from 1.54 million tons at 0.50% Co.

2018 Ram Deposit Updated Mineral Resource Estimate (3)(4)

Category

Resource

Co (%)

Co

Cu (%)

Cu

Au (oz/t)

Au

(M tons)

(M lbs)

(M lbs)

(oz)

Measured(1)

1.50

0.66

19.9

0.78

23.6

0.017

26,000

Indicated(1)

2.37

0.54

25.8

0.89

42.2

0.018

42,000

M+I

3.87

0.59

45.7

0.85

65.8

0.017

68,000

Inferred(2)

1.82

0.46

16.7

0.81

29.4

0.015

27,000

  1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The Mineral Resources in this news release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
  2. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature. There has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
  3. The Cobalt cut-off grade for inclusion in the resource is 0.20%, no consideration of copper or gold content was used in determination of cut-off grade.
  4. Contained metal figures and totals may differ due to rounding of figures

Feasibility Study

The Company is currently working on a new Feasibility Study ("FS") for the production of a cobalt concentrate. This FS will incorporate simplifications to the previous flow sheet of the CPF, where the original design called for the production of cobalt, copper and magnesium sulphates, as well as gold and copper concentrate. The new, much simpler design to produce a single cobalt concentrate is expected to further de-risk the project and reduce CAPEX.

In addition, the Company has identified the potential to increase the targeted production rate from 800 tons per day ("tpd") to 1,200 tpd, an increase of 50% intended to provide more robust project economics and resilience to lower cobalt prices. A larger more robust plan will furthermore elevate eCobalt's position within the global cobalt market.

eCobalt will continue working with Micon International Limited to finalize the feasibility-level study for the 1,200 tpd mine plan. Work required over the next several months to complete the feasibility study with the new targeted production rate includes:

  • Adjusting the mining sequence, schedule and costing for 1,200 tpd;
  • completing the engineering to expand the mill to 1,200 tpd;
  • obtaining quotes to bring these cost estimates to feasibility-level; and
  • defining final concentrate specifications based on competitive commercial terms for off-take.


Permitting

eCobalt received a positive Record of Decision on its Mine Plan of Operations from the U.S. Department of Agriculture National Forest Service as well as a water discharge National Pollutant Discharge Elimination System (NPDES) permit from the U.S. Environmental Protection Agency in 2009. These permits remain in good standing.


The change in targeted production rate is not expected to significantly delay achieving full production, and will not require any adjustments to the planned surface disturbance of the mine and mill, therefore changes to the Company's permits which comprise the approved Plan of Operations are not expected.

Opportunities

The ICP has the potential to be a district-scale project of significant importance on a global scale, providing a safe, secure and transparent supply for the growing cobalt market.

The Ram deposit, which currently hosts 100% of the ICP’s NI 43-101 compliant reserves and resources and represents only 7% of eCobalt’s total claims, remains open at depth and along strike offering significant opportunities for expansion. The Sunshine and East Sunshine deposits are within a mile trucking distance of the Ram and represent additional potential to the mineral resources of the ICP. In addition, more than a dozen underexplored prospects and exploration targets have been identified within the property boundary.

Technical Reports

National Instrument 43-101 compliant Technical Reports and other information are available for review and download at www.sedar.com.