US Strategic Metals lines up potential US$400M loan for Madison cobalt project

US Strategic Metals has lined up a potential loan package of up to US$400 million to redevelop the former Madison cobalt mine in Missouri.

The Export-Import Bank of the United States has signed a non-binding agreement that could see it provide the funding with a term of 15 years, the company said in a release. 

Established in 2018, US Strategic (formerly Missouri Cobalt) currently recycles essential metals from lithium-ion batteries and processes third party concentrates at its metallurgical plant in the state.

Madison holds what US Strategic Metals says is North America’s largest cobalt reserve. 

The site hosts a mine that operated from 1844 to 1961. In 2003, the U.S. Environmental Protection Agency designated the area as a Superfund site due to the erosion of tailings and began clean-up efforts. As part of its acquisition in 2018, US Strategic partnered with local government and the EPA to execute a five-year clean-up plan.

In 2020, the geologic and block models were updated to survey mine reserves, including a prefeasibility study on a well-drilled resource that is estimated to hold 72 million lb. of recoverable cobalt, 105 million lb. of nickel and 103 million lb. of copper. The resource could support mining for 18 years, according to the study. 

The EXIM loan, in combination with existing equity and credit facilities, would provide funding for substantially all of the anticipated construction and development capital required to complete the project, US Strategic said release.

By the end of 2023, US Strategic has obtained nearly US$500 million in funding and commitments, the most recent being a US$230 million financing from affiliates of Appian Capital Advisory. Past funding commitments include US$120 million from HPS Investment Partners and US$50 million from offtake and sourcing partner Glencore (LSE: GLEN).