It used tailings from its winterised Castle mine in Ontario and processed it at a nearby facility - which it plans to acquire - to produce the silver, then separately recovered cobalt from the same waste material.

Metallurgical tests in May had shown the tailings' potential.

The company, which changed its name from Castle Silver Resources last year, said the pilot plant at the past-producing mine had separated leaf silver and created silver gravity concentrate from mineralised waste material.

The concentrate and leaf silver were then smelted and produced three bars at a PolyMet facility the company is acquiring in the town of Cobalt, one hour away.

Canada Cobalt had signed a binding letter of intent last week to acquire the privately-held PolyMet Resources, which it said owned the district's only facility which combined bullion pouring, bulk sampling, commercial assaying and e-waste processing.

It will acquire PolyMet for a near-even split of cash and shares totalling C$650,000 (US$492,000).

"Through its proprietary and environmentally friendly Re-2OX Process, and further demonstrating proof of concept, Canada Cobalt also used the same waste material to separately recover cobalt and produce a cobalt sulphate at SGS Lakefield," the company said.

It is planning "a significant ramp-up" which it said would officially begin with the next, larger silver pour.

It is aiming to become a vertically integrated North American leader in cobalt extraction and recovery, while also exploiting "a powerful new silver-gold market cycle".

The company has also resumed an underground drilling programme at Castle, focused on a cobalt-silver rich area near the adit entrance.

Canada Cobalt raised $728,000 (US$551,000) at 30c per unit in mid-September and two weeks later said it had arranged a $1 million (US$0.76 million) private placement with strategic investors at 35c per unit.

Its shares, which have fallen from 70c in November to 25c in August, closed up 5.6% to 37.5c, capitalising it at $31.4 million (US$23.8 million).