The Idaho Cobalt Project, located in east central Idaho, is a unique 100% owned primary cobalt deposit with production estimates of 1,525 tons annually of super-alloy grade high purity cobalt metal over a minimum ten year mine life. The project's output will be equivalent to 3.3% of the entire global cobalt supply and it will be able to feed 14.9% of North American demand for cobalt.
Earnings Projections & Economics (US$)
Based on Samuel Engineering's NI-43-101 compliant technical report of their Bankable Feasibility Study, utilizing a base case cobalt price of $22.52 per pound, and a 7.5% discount rate, the Net Present Value (NPV) is $87.29 million with an Internal Rate of Return (IRR) of 22.30%. The average operating cost per pound of cobalt is $7.73, with an average annual Net Cash Flow of $34,162,100 over a ten year mine life. Total estimated capitalization expenditures for the mine, mill, and retrofitting of the hydrometallurgical refining facility are estimated at $138.7 million.
Reserves and Resources
Diluted, Proven and Probable Reserves of the project currently stand at 2.636 million tons @ 0.559% cobalt, 0.596% copper and 0.014 ounces per ton gold utilizing a 0.2% cobalt cut-off for a ten year mine life. In addition, there are inferred resources of 1.122 million tons grading 0.585% cobalt, 0.794% copper and 0.017 ounces per ton gold (after MDA, 2006) outlined on the project. This represents contained metals of 42.6 million pounds of cobalt, 49.1 million pounds of copper and 56 thousand ounces of gold.
Minimal Environmental Impact
The underground operation will create minimal surface disturbance and will be 100% self-contained with the goal of no measurable impact on surface waters. Low impact methods will help to ensure a minimal environmental footprint. Formation is dedicated to environmentally sound practices for mine construction, production and eventual closure. Formation strongly believes that this project will exemplify how mining and respect for our environment can co-exist.
Idaho Cobalt Project Status
The project received a positive National Instrument 43-101 compliant Bankable Feasibility study in July 2007, a final Environmental Impact Statement in June 2008, a Record of Decision from the US Department of Agriculture Salmon Challis National Forest in January 2009, a Record of Decision from the U.S. Environmental Protection Agency in February 2009 and a Section 401 Certification from the Idaho Department of Environmental Quality in February 2009. All essential environmental mine permits are now in place and the company is pursuing mine construction financing.
Strong political support includes members of the US Congress and US Senate. Idaho's Governor stated "Clearly, your (Idaho Cobalt) project will better the lives of people in Idaho as well as across the country and the world". Several public review (Scoping) meetings held to date reveal overwhelming support for the project (see Letters of Endoresement Section under "Investor Info").
Potential to Increase ICP Mine Reserves:
The potential to dramatically increase reserves is considered excellent with a district potential of 50 million tons (after Hughes). The project contains over 20 distinct target zones and of those only four have been drilled to date. Of those four, only one is being used (the Ram deposit) in the calculations of reserves and resources in the current mine plan. This deposit remains open at depth and along both strike directions.
