Sign up Australia
Proactive Investors - Run By Investors For Investors
Why invest in COB?
Cobalt Blue Holdings Ltd: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Cobalt Blue to get drill spinning targeting cobalt resource growth and upgrade

The company will undertake the largest single drilling campaign at the Thackaringa Cobalt Project near Broken Hill.
Cobalt sulphate crystals from Thackaringa project
INVESTMENT OVERVIEW: COB The Big Picture
Battery-ready cobalt sulphate produced from the Thackaringa project

Cobalt Blue Holdings Ltd (ASX:COB) is set to start the largest single drilling campaign at its Thackaringa Cobalt Project in far west NSW targeting resource growth and improved resource classification.

More than 15,000 metres will be drilled over the next six months with an updated mineral resource statement due by the end of the June quarter of 2019.

This work forms part of a bankable feasibility study (BFS) at the project close to the mining centre of Broken Hill.

READ: Cobalt Blue sees growing appetite for key battery metal during Korean visit

The company, which is the only ASX-listed pure cobalt player, is developing an integrated cobalt supply strategy based on the Thackaringa project.

Project optimisation studies are also being carried out for the BFS, which follows completion of a pre-feasibility study (PFS).

READ: Cobalt Blue Holdings delivers ‘comprehensive PFS that showcases Thackaringa Cobalt Project’

The drilling campaign has five broad aims:

- Improved resource classification – defining measured resources;
- Growth of resources – exploration along margins of existing mineralised bodies;
- Confirmation of the location of infrastructure and site layout – geotechnical and hydrogeological drilling for project infrastructure and process plant civil works;
- Overburden definition – identification of oxide and/or transition layer(s); and
- Blue-sky exploration – follow-up previously identified geophysical anomalies.

READ: Cobalt Blue Holdings’ Board confident of funding next stages of world-class cobalt project

Between the second half of 2016 and the first half of 2018, COB drilled 20,445 metres in 38 diamond drill holes, 93 RC holes and 3 RC holes with diamond tails over three campaigns.

Mineral resource growth for Thackaringa deposits including Pyrite Hill, Big Hill and Railway Hill.

This has resulted in a 118% increase in total mineral resource tonnes and a 124% increase in contained cobalt.

The resource stands at 72 million tonnes at 852ppm cobalt, 10% iron, 9.3% sulphur and 17% pyrite for 51,500 tonnes of contained cobalt at a 500ppm cobalt cut-off.

Improved resource classification

Based on PFS results, COB aims to define a component of measured mineral resources, which will require infill drilling at around 40-metre spacing to improve geological confidence and data density.

This drilling will also target improved classification of inferred to indicated mineral resources.

During the BFS, indicated resources will be evaluated for conversion into probable ore reserves while measured resources will be evaluated for conversion to proven reserves.

Typically, the target quantity for proven reserves would be sufficient to fulfil the initial three to five year period of the proposed project production, as defined in the BFS.

Mineral resource growth

COB also aims to increase inferred resources by targeting down-dip extensions at the Pyrite Hill deposit and shallow strike extensions at the Big Hill and Railway deposits.

Priority exploration targets identified after a heliborne electromagnetic survey (VTEM-Max).

Growth of the overall resource is a key component of achieving COB’s target of a mine life of 20-plus years at Thackaringa.

Future additional drilling campaigns are expected to be undertaken following completion of the current campaign.

Oxidation boundary definition

Near-surface holes will also be drilled to better define the oxide and/or transition oxide-sulphide layers which represent shallow overburden of 10–25 metres on top of the fresh sulphide ore.

Oxidised and partially oxidised material has been excluded from the resources and subsequent proposed mining and processing studies.

Drilling will identify if any cobalt is present through the oxidation profile, and if so, related metallurgical studies will then be undertaken.

Infrastructure and site layout

To support continuing technical studies commissioned for the BFS, COB will complete additional drilling for geotechnical, hydrological and hydrogeological assessment related to infrastructure, mining and process plant planning.

Blue-sky exploration

In September 2017, the 63 square kilometre project area was surveyed using a heliborne electromagnetic (EM) survey (VTEM-Max) at a nominal 100-metre line spacing.

Several strong EM responses outside the existing Pyrite Hill, Railway and Big Hill resources were recorded and have been cross-checked with coincident geophysical and geochemical anomalism.

In the upcoming campaign, COB will undertake some preliminary drilling at these targets.

Previous drilling at Thackaringa.

READ: Cobalt Blue optimising the Thackaringa Cobalt Project

There are four optimisation studies for investigation in the BFS:

• Mine life extension: Substantial potential exists to extend project life targeting inferred inventories from the known resources and from other sources beyond Thackaringa.

The 15,000-metre drilling campaign will culminate in a new resource model.

CEO Joe Kaderavek said a 20-year mine life was a vastly superior investment to the current 13-year study.

• Metal recovery optimisation: COB adopted a conservative 85.5% cobalt recovery rate for the PFS (versus an already achieved 88% recovery).

Larger scale testing will be conducted during the BFS, incorporating recycle streams, for which a 90% recovery rate is being targeted.

"This again substantially improves project economics. We will be releasing these results by the end of Q2 2019," Kaderavek said.

• Optimisation of power consumption/pricing: 22% of the site cash costs were related to electrical power.

Strong opportunities exist for minimising energy consumption as well as distributed energy generation (solar photovoltaic) to substantially reduce these costs.

These results will be released by the end of Q2 2019

• Process plant tailings: A tailings optimisation study will be undertaken with results to be delivered by end of Q4 2018.

Independent PFS review

In parallel with these studies, Wood PLC (formerly AMEC Foster Wheeler), a global engineering firm, has been engaged to provide a gap analysis review of the PFS.

This review, which is expected to be finalised shortly, will help shape the BFS scope and ensure that critical study areas are being addressed with appropriate resources.

Farm-in with Broken Hill Prospecting

COB is undertaking exploration and development programs on the Thackaringa project as part of a farm-in joint venture agreement entered into with Broken Hill Prospecting Ltd (ASX:BPL).

Completion of the PFS has seen COB reach a 70% beneficial interest and will reach 100% on achievement of further milestones.

Until the farm-in obligations have been satisfied, COB’s interest in the tenements is beneficial.

When this is achieved it will become the registered holder of the Thackaringa project tenements. BPL remains the registered holder of the tenements until the farm-in is complete.

View full COB profile View Profile

Cobalt Blue Holdings Ltd Timeline

Related Articles

1531831317_LesothoBrown_hires.jpg
July 18 2018
Tsodilo Resources is currently evaluating a diamond project situated right in the heart of one of the world's most prolific diamond-producing areas
1533690691_Orion-Prieska-UG.jpg
August 08 2018
The company has a joint venture with Nova-Bollinger owner Independence Group that could allow the bigger company to snap up its prospective nickel projects in South Africa.
1535033582_lithium-periodic-11.jpg
August 24 2018
American Manganese is blazing a trail in the recovery of metals from scrap cathode material rejected by battery manufacturers

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use