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.
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).
The drilling campaign has five broad aims:
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.
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.
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
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.