Technical Report

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The Feasibility Study (“FS”) is based on an underground mine with a target production rate of 800 short tons per day (“tpd”) and a weighted average annual production of 2.4M lbs of cobalt, 3.3M lbs of copper and 3,000 oz of gold over a 12.5 year mine life with an estimated pre-production period of 24 months utilizing a 0.25% cobalt cut-off grade. The economic model uses a 34% corporate tax rate and a 7.5% discount rate, resulting in an after-tax NPV of $135.8M and an IRR of 21.3% using an average base case price of $26.65/lb for contained cobalt in cobalt sulphate.

The Idaho Cobalt Project (“ICP”) is 100% owned by the Company’s wholly owned subsidiary, Formation Capital Corporation, U.S. The FS was prepared by Micon International (“MI”) in conjunction with SNC Lavalin (“SNC”) both of Toronto, Canada. The ICP is expected to be an underground mine and mill, exploiting the Company’s Ram deposit, located within the Idaho Cobalt Belt outside the town of Salmon, Idaho. Additionally, the Cobalt Production Facility (“CPF”), a hydrometallurgical refining operation located on a railhead in Blackfoot, Idaho, is expected to be built. The ICP would be a vertically integrated project designed to produce cobalt chemicals for the rechargeable batteries market in addition to by-products of copper concentrate, copper sulphate, magnesium sulphate and gold.

Feasibility Study Results Summary

(Note: All monetary values used in this news release are in Q3 2017 US dollars)

Feasibility Study Description

As previously described, the FS is based on an underground mine with a target production rate of 800 short tons per day (“tpd”) and a life of mine production of 31.8M lbs of cobalt, 42.8M lbs of copper and 39,241 oz of gold. The project has over 12.5 year mine life with weighted average annual production of 2.4M lbs of cobalt, 3.3M lbs of copper and 3,000 oz of gold and an estimated pre-production period of 24 months utilizing a 0.25% cobalt cut-off grade. The economic model uses a 34% corporate tax rate and a 7.5% discount rate, resulting in an after tax NPV of $135.8M and an IRR of 21.3% using an average base case price of $26.65/lb for contained cobalt in cobalt sulphate.

The Company completed a Preliminary Economic Assessment (“PEA”) on March 10, 2015 utilizing the Company’s September 14, 2007 (revised May 19, 2008) feasibility study as a basis. The PEA included the completed environmental permitting process and construction at the mine and mill that was completed from 2011 to 2013 and subsequently placed on care and maintenance in May 2013. The FS utilizes an updated resource, mine model and mine schedule with a feasibility study level of design for the CPF to produce cobalt sulphate. A combined cobalt/copper/gold concentrate is to be produced from the mine and mill and processed at the CPF through hydrometallurgical processing of cobalt and copper bearing sulphides to produce cobalt sulphate heptahydrate which is used in the production of cathodes for rechargeable batteries.

Marketable by-products include copper concentrate, copper sulphate, magnesium sulphate and gold. Gold will be recovered through a gold carbon in leach circuit producing gold-loaded carbon which will be refined at a contract facility to produce doré. The stripped carbon will be returned to the CPF for reuse.

The ICP is 100% owned by eCobalt and there is no underlying royalty on the property. The FS has been compiled in accordance with National Instrument 43-101 guidelines and a Technical Report will be made available on SEDAR and on the Company’s website within 45 days of the date of this news release. Readers are strongly encouraged to review the final National Instrument 43-101 Technical Report in its entirety.

Mineral Resource and Reserves

MI updated the estimate of cobalt, copper, and gold resources in a three-dimensional resource wire frame and block model to be used for mine planning, design, and scheduling as part of the FS. MI utilized the previously estimated resources for the Ram deposit (completed by Mine Development Associates for the PEA) supported by their own geostatistical model and reserve criteria. The resulting model moved some PEA level Measured resources into the Indicated category and adjusted grades within the resource categories. Cobalt, copper, and gold reported resources in the FS model are shown in the table below. The stated resource is reported at a cobalt cut-off grade of 0.20% cobalt. There is approximately 34% dilution forecasted in the stope designs with additional dilution applied, by mining method and stope conditions, for over-break. The copper and gold resources and reserves are those resources and reserves carried within the stope blocks which attain the cobalt cut-off grade. No metal value is given to the copper or gold in determining the cobalt resource cut-off. No metal recoveries are applied, as this is an in-situ resource.

Ram Deposit Mineral Resources at 0.2% Co Cut-off

Ram Deposit Mineral Reserves at 0.25% Co Cut-off

Economic Highlights

The FS economic model uses a 34% corporate tax rate and a 7.5% discount rate, resulting in an after tax NPV of $135.8M and an IRR of 21.3% using an average price of $26.65/lb of contained cobalt in cobalt sulphate. Gross revenue during the life of mine is estimated to consist of 75% cobalt sulphate, 15% copper sulphate, 5% magnesium sulphate, 4% gold and 1% copper concentrate. A pro forma cash flow was developed using conventional methodology utilizing the base case discount rate, before and after-tax determination of project economics, annual cash flows discounted on an end of year basis with costs estimated in Q3-2017 US dollars.

LOM Cobalt Sulphate and By-Product Revenue

The total LOM capital and reclamation cost is estimated at $288.1M, including $186.7M for initial capital, $5.8M for long term water treatment bond collateral, and $95.6M in sustaining capital and mine development capital during production over the LOM, reclamation and closure cost. Prior to the deferral of the ICP to care and maintenance status in May 2013 due to depressed market conditions; the Company spent $65.3M on the ICP for earthworks, engineering, and milling equipment including the crushing, ball mill, flotation and filtration circuits, pumps, grizzlies, hoppers, conveyors, etc. These are sunk costs and not included in the remaining initial capital costs.

Project sensitivities were evaluated against standard potential variances in the cobalt price, discount rate, capital expenditures, and operating costs. Results of the sensitivity analysis are presented in the following tables and charts.

Cobalt Sulphate Price Forecasted Sensitivity:

*Base case

The table above shows that $1.00/lb change in the price of cobalt sulphate will lead to a $14.4M change in after tax NPV and 1.3% change in after tax IRR.

Discount Rate Forecasted Sensitivity:

*Base case

Summary of Annual Forecasted Cash Flow

Sensitivity of Estimated After-Tax NPV to Prices (all products), CAPEX and OPEX

Cobalt Market- Growing Demand and Supply Deficit Forecasted (CRU)

The Company commissioned a marketing study with CRU Consulting of London, United Kingdom, to provide data and forecast on cobalt and by-product markets and specifically cobalt sulphate used in rechargeable batteries applications and the ICP’s position within the battery supply chain. The following cobalt marketing information is referenced from the Market Study for the Idaho Cobalt Project September 2017 Report authored by CRU Consulting.

Cobalt consumption has remained strong over the past six years because of stable demand in alloys, established chemical markets and rapid uptake in lithium ion batteries. CRU expects global refined cobalt demand to approach 166,210 tonnes by 2026 (2016 - 96,000 tonnes). Demand is forecast to grow at 6% CAGR in the mid-term spurred on by growing demand for lithium ion batteries. Demand will then increase at CAGR 4.1% in the long-term (2021-2026) as the EV sector matures and the metals sector continues to grow robustly.

Cobalt mine supply is consolidated in a small number of countries and dominated by the Democratic Republic of Congo. The country’s share of global supply is forecast to reach 67% in 2021 despite considerable risks to political stability, infrastructure development and energy supply. Cobalt chemicals supply is dominated by China, the largest importer of cobalt concentrates and hydrometallurgical intermediates. Being located in the United States, the ICP with access to its own mined feedstock, sustainable operating practices following ethical principles is an advantageous position in the current market environment. The ICP has the opportunity to become the reliable and transparent source of cobalt sulphate supply to the domestic market and export markets outside DRC and China.

Cobalt sulphate demand is rising strongly and is likely to outperform demand for other cobalt chemicals and demand in metallurgical applications in the future. Tightness in both the metallurgical and non-metallurgical sectors will lead to increasing competition for both mined and refined supply helping support prices at or above current levels over the next ten years. Most of this deficit will be felt in the non-metallurgical market, where supply and demand is expected to increase at CAGR 7.0 % and CAGR 7.9 % respectively. This means additional chemical refining capacity will need to be created in the mid-term. Delays in capacity increases could occur as a function of political instability, energy disruption or as a function of falling copper and nickel prices. The global supply of refined chemicals is becoming increasingly prone to mine supply bottlenecks, a major upside risk to cobalt chemical prices.

Based on CRU’s long term real price forecast, the FS uses a weighted average price of $26.65/lb for contained cobalt in cobalt sulphate, which has an average premium of $1.47/lb above 99.3% cobalt price forecast.

FS Risks

The most significant potential internal risks associated with the ICP are uncontrolled dilution, lower metal recoveries than those projected, operating and capital cost escalations, unforeseen schedule delays, and the ability to raise sufficient financing to execute the project. The central external project risks are product prices and markets. These risks are common to most mining projects, many of which can be mitigated with adequate engineering, planning and pro-active management.

Project Opportunities

There are significant opportunities that could improve the economics of the ICP. Including those opportunities typical to all mining projects, such as changes in metal prices, exchange rates, etc., there are additional opportunities that exist. The mineral resource has not been fully delineated and there is an excellent opportunity to expand this resource. As a result, the Company has initiated a targeted drilling program, in consultation with MI, that has the potential to immediately increase the indicated mineral resource. In addition, over a dozen potential targets have been identified in the immediate area within the claim block of the ICP. Four of these have been drill tested with several intercepts exceeding the current cut-off grade. There is also potential to add additional resources from the nearby Black Pine property owned by the Company which potentially could provide additional feed for the ICP mill.

There is an opportunity for the mine to process higher grade material for short durations through the optimization of the mine plan and sequence production to capitalize on market conditions. Opportunities for CPF capital and operating cost improvements exist through optimization studies during detailed design. There is potential to increase overall recoveries and obtain better shipping and handling terms through formal negotiations in the future and to incorporate offtake and/or streaming agreements on some or all of the products to be produced.

Conclusions

MI and SNC have concluded that the FS contains adequate detail and information to support the positive FS outcome shown for the ICP. Standard industry practices, equipment and design methods were used in the FS. MI and SNC further concluded that the ICP contains a viable cobalt and base metal resource that can be successfully mined by underground methods and recovered to concentrate with conventional milling processes. Using the assumptions contained in the FS; in the professional opinions of MI and SNC, the project economics merit consideration by eCobalt to proceed to the project financing and execution stage. To date the Qualified Persons, in accordance with National Instrument 43-101, are not aware of any fatal flaws for the ICP. The advancement of the ICP towards production is contingent upon financing.

Moving Forward

The positive results of the FS have given Management and the Board of Directors a clear mandate to move the ICP towards project financing and development. Management’s immediate goal is to evaluate a variety of opportunities for the ICP. The Company is also considering securing offtake arrangements for cobalt sulphate heptahydrate. Independent of the FS, the Company has produced cobalt sulphate crystals from recent metallurgical test work which were shipped to potential offtakers for evaluation. Initial feedback regarding product quality has been positive and current requests for additional material for evaluation are being fulfilled.

Preparation of the ICP mine and mill site for construction activities, expected to commence in earnest next year with successful mine financing in place, continues with access road upgrades, existing facilities maintenance, preparation of temporary power for construction, and approved water discharge line maintenance. At the CPF located in Blackfoot, ID, the existing pre-purchased building has been transported to the site.

Senior and Support staff capacity ramp up continues with the recent additions of Mr. Floyd Varley, COO, Mr. Llee Chapman, Operations Administrator, and Mr. Mandeek Manhas, Controller. Hiring of key employees in various functional areas is being implemented to support preconstruction and project development goals.

Concurrent with the above activities, Management also plans on pursuing the numerous opportunities for project enhancement.

The Qualified Persons as defined by National Instrument 43-101 responsible for the FS and this news release are listed below:

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