Cobalt Blue Holdings (ASX:COB) is preparing for the next stage of field work, which is about to commence at its Thackaringa Cobalt Project located near Broken Hill in New South Wales.
Since listing in February 2017, the company has achieved a lot including its 8,000-metre successful drilling campaign that resulted in a 55 million tonne resource grading 910 ppm cobalt.
The resource was used as a foundation for the scoping study published in mid-July 2017, which will be used as a baseline for the upcoming pre-feasibility study.
Mineralisation remains open at depth and along the entire 4.5-kilometre resource strike length.
Clearly, more work is required to outline the full scope of the cobalt resource.
Upcoming field work program
Firstly, an aerial geophysical survey will be conducted over the entirety of the Thackaringa tenements.
The helicopter-borne electromagnetic system has commenced and is expected to finish by 30 September.
The survey represents a strong option to better understand Thackaringa’s geological potential.
Cobalt Blue’s target remains a 40 million tonne Indicated resource by 1 April 2018 with drill rigs mobilising to site and drilling to commence next week.
The program consists of a total 90 holes comprising both reverse circulation and diamond drilling across the Railway, Pyrite Hill and Big Hill deposits.
The Railway deposit will be the first priority with Pyrite Hill to follow.
Focusing on the cobalt battery market
Globally, cobalt demand is split into two streams - namely batteries and traditional alloys.
These vastly different demand drivers are causing rapid market bifurcation and presenting a strong opportunity for Cobalt Blue.
The company’s focus is on the battery market, and in particular on combining cobalt and sulphur into a cobalt sulphate crystal.
These crystals are typically priced at parity or small premium to the London Metal Exchange cobalt price.
In contrast, lower value cobalt concentrates are priced at only 20-30% of the same benchmark.
Thackaringa ore, with both cobalt and sulphur occurring naturally, has a significant advantage in this production chain.
This advantage is amplified thanks to the availability of people, power, water, road and rail at nearby Broken Hill.
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