St Georges Eco-Mining (SX.C) announced that it has executed a final option agreement that lets them secure the land and building for its proposed battery recycling plant.
St Georges plans on building the battery recycling plant in the deep seaport of Baie-Comeau on the Québec North Shore. SX and Roberge Industries, the other party to the deal, entered into a binding term sheet back in April. The original term sheet had called for a long-term deal to be signed within 30 days, however, in May the company was still working on their feasibility studies, a delay which was likely caused in part because of the COVID-19 pandemic, which forced St Georges to follow strict guidelines to set-up a camp for their exploration program workers.
St Georges plans on building the battery recycling plant in the deep seaport of Baie-Comeau on the Québec North Shore.
The feasibility study was released last Thursday, which allowed St Georges to finish its negotiations with Roberge. The report modelled the recycling plant to have large growth, beginning at 10,000 tons of batteries per year from the first day of operation, up to 90,000 tons of batteries to be recycled per year using the initial four circuits. The biggest challenge at the start will be battery supply, as there are not many electric vehicle (EV) batteries waiting to be recycled, due to most EVs being fairly new, however SX expects the amount of battery recycling to grow in the coming years.
Early design and engineering reviews of the industrial plant being secured have not identified the need for a major overhaul on the Baie-Comeau plant, and St Georges will have 45 days following the reception of its final feasibility study report to decide to enter into a lease agreement for the building. SX will be charged a pro-rotated rate for the lease established by the parties, likely to save money in the early years when production is still lower, and an option to acquire the land and building has already been priced.
As part of the deal, St Georges will issue to Roberge 500,000 common share warrants with an execution price of $0.75 for two years, with a clause that allows them to accelerate the expiration of these warrants if the share price of St Georges exceeds $1.13 at any time after the 4-month regulatory hold period.
Back in April, when the two companies first announced their term sheets, Herb Duerr, St Georges’ President, commented, “I am excited that our subsidiary, EVSX Corp., has obtained its first base of operations for battery recycling within the welcoming community of Baie-Comeau … and the added benefit of partnering with a locally sourced engineering firm that knows the lay of the land … This is a great starting point for EVSX and St-Georges Eco-Mining.”
Following today’s news, SX shares are up half a cent and are currently trading at $0.345.