|DEMAND IS HIGH|
COBALT 11-27-17 LMS
In answer to local questions about the Idaho Cobalt Project (ICP) the Lemhi County Commissioners were told Monday “It’s for real. The market is there. It’s time for this project.”
Many local residents have been thoroughly acquainted with the ore called Cobalt for years, dating back to the mining days of the 50’s and 60’s. Recent world interest in the ore is pretty much old news to those who lived the Cobalt days. The recent focus on electric cars powered by lithium batteries which contain the specialty metal known as Cobalt has created a huge interest in the ore. Presently the Republic of the Congo is producing some Cobalt but it is only mined as a by-product of Copper and the country is in the midst of civil war. The only Cobalt belt in the free world is in Lemhi County and the Idaho Cobalt Project is the only near term, environmentally permitted, primary Cobalt project located in the United States.
On November 27 the commissioners were introduced to Llee Chapman, General Manager of Formation Capital Corporation’s Idaho Cobalt Project. Formation’s Canadian based partner is eCobalt Solutions Inc.
Chapman updated the board as to what is currently underway at the mine near the old townsite of Cobalt. He said that first and foremost the water treatment plant has to be up and running. The plant has been re-engineered, is being built and is expected to be ready by April. The power system design is scheduled to be completed next week. The system plus booster stations will be ready to go in the Spring and a heliport has been opened. Road work around the mine has been ongoing and the project has reached the stage of renegotiating an agreement with the county for maintenance of the county road leading to the mine. An agreement first put in place in 2009 is being used as a template and will be fine-tuned for present needs. Chapman has been working with county crews and was highly complementary about the quality of the county’s Road and Bridge Department. “Your road group has been the greatest group to work with, ever.” He was speaking as an area resident as well as his experience since working on the Cobalt project. “They tell you what they think they can do…and they do it.”
The only access to the mine at present is the Deep Creek Road and with safety being a primary focus Chapman is not satisfied with having a dead end road with only one access in and out. He will be asking the Forest Service to work with Custer County for a permit and road use agreement on the Morgan Creek road. He feels that would create a horseshoe ingress/egress situation which would be far safer.
Curt Rosin of the Road and Bridge Department and Department Supervisor Chris Fredrickson were in attendance and entered into the discussion on road security, on-call arrangements, maintenance and shipping schedules. Formation Capital will be putting funds in a trust for any Cobalt road emergency funding the department may need. Fredrickson has documented all Cobalt related work done to date in a separate file.
The commissioners were concerned about the possibility of another Winter like the last one and the strain any additional work may cause the department. Fredrickson indicated that with the agreement reached between the county and Forest Service, as to joint efforts on keeping the downriver road open, even if it is another heavy snow year everyone is much better prepared. And, in that event, Fredrickson said there are seasonal employees he can call. Chapman said when the project is running year around there will be road grading equipment at the mine as well as road crews to operate it so any road clearing work will be a combined effort with the county.
Chapman said that this year Formation crews will be pulled out by January 31 with a plan of returning in March when the two-year construction phase will begin.
As to the financing and schedule, Chapman said the Canadian partners have secured $20 million with a goal of securing another $200 million. He said they expect to know funding results in the next month. The form of Cobalt product the project will eventually target for production is not currently known due to the volatilely active market. The original plan for a $125 million crystallite factory in Blackfoot remains part of the funding goal but is now separate from the mining project itself. Chapman said they will wait to see where the market demand is going but will have the funds to proceed with the factory if that’s the market direction indicated.
In the meantime work will proceed to get the Cobalt site ready for construction which should begin in the Spring. He said the first workers will be specialists in underground work. After that the rest of the work force will be hired, hopefully including people who have had to leave the area to take jobs in North Dakota and Nevada.
The Idaho Cobalt Project has an initial mining-life expectancy of 12 and a half years. Chapman said there is now reason to believe the ore body is even larger than previously thought.
Lemhi County Attorney Bruce Withers advised the commissioners on what points need to be addressed while formulating the new agreement. Attorney Chase Slavin accompanied Chapman.
A draft road agreement between the county and Formation Capital will be addressed at the December 11 meeting of the Lemhi County Commissioners.
Chapman has held senior positions in the mining industry for over 35 years.
From 1989 to 2000 he worked for and helped build and develop the Goldstrike Mine in Elko, Nevada for Barrick Gold Inc. He is a graduate of Idaho State University and holds a B.A. in Accounting and has received his CPA certificate in the states of Idaho, Arizona and Montana. He has served as President of the Board of Trustees of the Northwest Mining Association, and served as an Elko County Commissioner/Chairman.
Chapman and his wife have owned a home at Williams Lake for 12 years and he has been acquainted with Formation Capital and its projects for the past 20 years.
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