Before placing its Idaho Cobalt project on care and maintenance status in 2013, Formation Metals spent
more than $65 million on engineering, earthworks and equipment. A crew is shown above at work in late
2012, installing the liner for the project’s tailings storage facility. (Photo courtesy of Formation Metals)

The Idaho Cobalt project comprised an underground mine and mill outside the town of Salmon, Idaho, and a cobalt production refining facility (CPF) to be located at a railhead in southern Idaho. Current plans call for a combined cobalt-copper-gold concentrate produced by the mill to be shipped to the CPF for hydrometallurgical processing to produce cobalt sulphate heptahydrate utilized in the production of cathodes for the rechargeable battery market. Marketable byproducts would include copper concentrate, copper sulphate pentahydrate and magnesium sulphate used primarily in the agricultural industry, and gold.

Life-of-mine production of metals contained in the project’s products is estimated at 35.4 million lb of cobalt, 57.4 million lb of copper, and 46,858 oz of gold.

Prior to halting construction of the project in 2013, Formation Metals invested more than $65 million in project development for earthworks, engineering, and milling equipment, including the ball mill, flotation circuits, grizzles, hoppers, conveyors, etc. The new PEA estimates an additional capital requirement of $146.8 million to complete the project and $54.7 million for sustaining and mine development capital over the life of the mine.

Mine development and production are based on a targeted mining rate of 800 st/d. Mine life is planned at 12.5 years. The project’s zones of economic mineralization range from 1 ft to more than 20 ft in thickness, with an average dip of 55°. Based on this geometry, underground selective cut-and-fill mining methods will be employed to mine the deposit. Areas with a horizontal width of 8 ft or greater will be mined by mechanized cut-and-fill using narrowvein jumbo drills and small LHDs. In zones where the horizontal width is less than 8 ft, slusher mining and jacklegs will be used to mine to a minimum width of 6 ft.

If the mechanized jumbo drills and LHDs require more operating room, the minimum horizontal mining width for mechanized equipment will become 10 ft, and slusher mining will be used in areas of less than 10 ft horizontal width.

Measured and indicated resources included in the mine plan total 3.48 million st at a 0.20% cobalt cut-off, with average resource grades of 0.55% cobalt, 0.75% copper, and 0.017 oz/st gold. An additional 1.68 million st are classified as inferred. The mineral resources have not been fully delineated and offer opportunity for expansion.

The Idaho Cobalt project PEA was prepared by Samuel Engineering of Denver, Colorado, in conjunction with Mine Development Associates of Reno, Nevada.

Formation Metals President and CEO Paul Farquharson said, “Management is very encouraged with the results of the PEA and looks forward to advancing the Idaho Cobalt project toward feasibility. As announced in January, metallurgical test work suitable for a feasibility study has already commenced on samples from the project to characterize the final end products we plan to produce. The company is optimistic about the future of the cobalt market and believes the project will be well positioned to meet the growing demand for battery-grade cobalt chemicals in the United States.”