Cobalt Blue Holdings Ltd (ASX:COB) has received positive results from a pre-feasibility study (PFS) into the Thackaringa Cobalt Project near Broken Hill that justify proceeding towards commercial development.
The PFS demonstrates that the ore reserve case for the Thackaringa joint venture is NPV positive and that the project is economic.
Bankable feasibility studies (BFS) will now be undertaken for the project, for which a maiden probable ore reserve of 46.3 million tonnes at 819 ppm cobalt has been established.
Cobalt Blue’s chairman Rob Biancardi said: “We are pleased to announce the PFS results for the world-class Thackaringa Cobalt Project.
“The PFS demonstrates the potential for COB to become a leading global supplier of cobalt sulphate to the lithium-ion battery industry.
“The project will now move into a bankable feasibility study while further resource work will target a 20-year mine life, as the production target case is limited to under 13 years.”
Stage II goals
Completion of the PFS and expenditure of a minimum of $2.5 million on exploration are the stage II goals Cobalt Blue was acquired to achieve under the Thackaringa joint venture agreement.
Satisfactory completion of stage II will entitle Cobalt Blue to earn a 70% beneficial interest in the Thackaringa project, up 19% from the current interest.
Further exploration and development milestones will enable it to increase its interest to 100% and until this is achieved the interest remains beneficial.
BPL remains the registered holder of the Thackaringa project tenements until the farm-in is complete.
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The PFS has detailed a technically feasible and economic project for production of cobalt sulphate heptahydrate and elemental sulphur from the Thackaringa deposits.
The project assumed an annual ore throughput rate of 5.25 million tonnes.
Using the mining ore reserve, a project life of 9.3 years was delineated with 10 years of operations including a ramp-up period.
A production target was modelled using sensitivity analysis and this extended mine life to 12.8 years.
This target of 58.7 million tonnes at 802 ppm cobalt included the probable ore reserve and a partial component of the inferred resource of 72 million tonnes at 852 ppm cobalt, 9.3% sulphur and 10% iron.
More exploration will be needed to upgrade sufficient inferred resources to meet this target.
Cobalt Blue’s cobalt sulphate production chain.
Apart from the resource, other parameters that Mining One used in the PFS are:
There are four key opportunities for investigation in the BFS:
The development timeline for the Thackaringa project.
In the PFS, a preliminary forward work plan was developed to undertake a BFS. The key milestones were proposed as follows: