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TORONTO - Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM), currently valued at $21.3 million, has initiated a feasibility study for a new battery recycling refinery near its existing cobalt refining operations north of Toronto. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations, despite facing significant operational challenges. The proposed facility will focus on processing 'black mass' from end-of-life lithium batteries, aiming to reclaim valuable metals such as lithium, nickel, and cobalt.
The study follows a year-long trial where Electra successfully produced technical-grade lithium and a nickel-cobalt product from recycled batteries. This initiative is part of Electra's strategy to establish a closed-loop system with North American battery manufacturers, enhancing control over the critical minerals supply chain, which is currently dominated by Asian refineries. With a debt-to-equity ratio of 0.83 and an overall financial health score rated as "FAIR" by InvestingPro, the company faces both opportunities and challenges in executing its strategic vision.
Electra's joint venture, Aki Battery Recycling, in collaboration with the Three Fires Group, plans to build a pretreatment facility for battery scrap. The resulting black mass will be sent to Electra for refining using a proprietary hydrometallurgical process. Mark Trevisiol, Electra's Vice President of Project Development, emphasized the importance of this study in scaling up to a commercial recycling operation, leveraging the company's first-mover advantage in North American cobalt sulfate production.
Dr. George Puvvada, Vice President of Metallurgy & Technology at Electra, highlighted the incremental innovation approach to enhance efficiency and minimize risk. U.S.-based Green Li-ion has been engaged to assist with the engineering and feasibility studies and may also supply processing equipment for the Ontario refinery site, pending study outcomes.
Electra CEO Trent (NSE:TREN) Mell reiterated the company's core strategy of reducing North America's reliance on critical minerals from foreign sources by creating a resilient domestic supply chain. Electra has consistently demonstrated its capability to produce high-quality, saleable products, including technical-grade lithium carbonate and nickel-cobalt MHP.
In 2023, Electra processed 40 tonnes of black mass to test its recycling process. In June 2024, the company received C$5 million from Natural Resources Canada to demonstrate the scalability and profitability of its recycling process. While analysts maintain optimistic price targets ranging from $3.91 to $5.61, InvestingPro data reveals the company is quickly burning through cash, with negative free cash flow of $12.37 million in the last twelve months. Electra's immediate focus remains on completing North America's first battery-grade cobalt refinery, with longer-term plans including nickel production and battery recycling. InvestingPro subscribers have access to 11 additional investment tips and comprehensive financial metrics for ELBM.
This news is based on a press release statement from Electra Battery Materials Corporation and contains forward-looking statements that involve risks and uncertainties.
In other recent news, Electra Battery Materials Corporation has seen a series of notable developments. The company announced a reverse stock split, converting every four existing common shares into one new share. This shift is aimed at meeting Nasdaq's minimum bid price requirement of $1.00 per share. Electra Battery Materials also appointed Marty Rendall as the new Chief Financial Officer, effective January 1, 2025. Rendall, an experienced finance executive, replaces retiring CFO David Allen.
Electra Battery Materials secured a non-binding term sheet for $5 million in financing for early development work at its Ontario Refinery project. It also formed a recycling venture with Indigenous-owned Three Fires Group to produce battery black mass from lithium-ion battery scrap. Additionally, the company secured a $20 million non-binding term sheet from a strategic partner and a $20 million grant from the U.S. Department of Defense for the completion of its cobalt refinery. However, the company reported a net loss of C$12.2 million in its first-quarter financials for 2024, leading analyst firm H.C. Wainwright to lower its price target while maintaining a Buy rating on the company's stock.
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