Canada's First Cobalt Corp said it now estimates that the operating cost for its permitted cobalt refinery in Ontario, Canada, will be $2.36 per pound of cobalt, a 13% reduction that it says improves refinery margins, enhances project economics and further solidifies the refinery's global competitiveness.

In an update on ongoing engineering studies at the project, the company said the estimated cost reduction will result in around $4 million of increased annual pre-tax cash flow compared to the May 4 engineering study, which estimated that the refinery could produce 5,000 tonnes of cobalt per year, resulting in 25,000 tonnes of cobalt sulfate product for electric vehicle (EV) batteries.

First Cobalt also provided and updated capital estimate of $60 million compared to $56 million in the original engineering study, as well as forecasting $41 million in undiscounted pre-tax free cash flow to the project during the first full year of production.

The company added that it has established a joint technical committee with Glencore PLC to continue to work on further technical and cost enhancements to the refinery, while final permit amendments and a closure plan are on track to be submitted before the end of the year.

A financing process has also moved into phase two and the firm is assessing several third-party financing proposals as discussions continue to advance with the private sector and government agencies.