Skip to main content

Two large shareholders in Canada’s Ecobalt Solutions Inc are calling for a change in senior management or the launch of a sales process, saying ongoing mine development delays are wasting a windfall from high battery sector demand.

Australian hedge fund Tribeca Investment Partners, which said it owns about 6 per cent of Ecobalt’s stock, said share declines stem from delays at the Idaho Cobalt project, the result of “strategic missteps.”

Ecobalt shares are down about 58 per cent this year after tripling last year, in line with cobalt prices that surged on rising demand from electric vehicle (EV) battery manufacturers.

Story continues below advertisement

That compares with a 7 per cent decline in London Metal Exchange cobalt. Shares in such peers as Australian Mines and Cobalt Blue are down more than 30 per cent.

“It is our view that the board must act to halt any further diminution in shareholder value,” Ben Cleary, a Tribeca portfolio manager, said in a July 25 letter to Ecobalt Chairman Scott Hean. “We now see the situation as urgent.”

A spokeswoman for the company said Ecobalt’s priority was proceeding with its strategic plan and bringing its project into commercial production, with the highest-value finance and offtake deals. The board and management take all shareholder views seriously, she said.

Australia’s Regal Funds Management is also frustrated, said portfolio manager Julian Babarczy, though it was not part of Tribeca’s letter. The fund’s Ecobalt holding is similar to Tribeca’s, he said.

In Tribeca’s letter, reviewed by Reuters, it said that it has repeatedly voiced concerns to Chief Executive Paul Farquharson, “but to date feel these communications have resulted in little or no appropriate action.”

The Vancouver-based company’s decision to produce cobalt concentrate rather than cobalt sulphate required a new optimized feasibility study, expected in the September quarter, Tribeca said. That is about one year after a study on the original mine plan was released, it added.

“There either needs to be a large change in strategy that accelerates the development of the project, or we need to find an owner of the company that is prepared to do that, or a change in management team,” Babarczy told Reuters.

Story continues below advertisement

Ecobalt said that its new plan enhances project economics and improves construction timelines.

Tribeca is also frustrated that Ecobalt has yet to announce a long-term supply agreement, the letter said.

“The company has received letters of intent for offtake and project financing from multiple parties, in numerous jurisdictions,” Ecobalt said, but they require due process.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter