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Cobalt Blue drilling targets resource upgrade and growth at Thackaringa

The largest single drilling campaign undertaken at the project near Broken Hill will see more than 15,000 metres drilled.

Drilling at COB's Thackaringa Cobalt Project
Reverse circulation and diamond drilling operations at the Pyrite Hill deposit

Cobalt Blue Holdings Ltd (ASX:COB) has the drill bit spinning in the largest single drilling campaign to date at the Thackaringa Cobalt Project near Broken Hill.

More than 15,000 metres will be drilled over the coming six months as part of a feasibility study with the primary aims of upgrading and growing cobalt resources.

Blue-sky drilling included

This will be done through infill drilling as well as exploration along the margins of existing mineralised bodies and through blue-sky exploration to follow-up previously identified geophysical anomalies.

Geotechnical, hydrogeological and sterilisation drilling will help confirm the location of infrastructure and site layout while drilling will also be used to identify oxide and/or transition layers.

Three Thackaringa deposits have resource estimates – Pyrite Hill with 26 million tonnes at 934ppm cobalt, Railway with 37 million tonnes at 842ppm and Big Hill with 10 million tonnes at 697ppm.

Drilling at Pyrite Hill

The campaign is underway with two diamond and two reverse circulation (RC) drill rigs working on site, having completed 755 metres at Pyrite Hill.

High-grade pyrite mineralisation intersected during the current drilling campaign.

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

COB aims to define a component of measured mineral resources and this will require infill drilling at around 40-metre spacing to improve geological confidence and data density.

READ: Cobalt Blue will use review to improve technical robustness of world-class cobalt project

During the mining study, measured resources will be evaluated for conversion to proven ore reserves. Typically, the target quantity for proven reserves would be sufficient to provide ore for the initial three to five-year period of proposed production.

Targeting resource upgrades

Additional infill drilling will target improved classification of inferred to indicated resources, which would be evaluated for conversion into probable ore reserves during the mining study.

The company 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.

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

Pyrite Hill deposit cross section showing strong continuity of mineralisation at depth.

Work on oxidation profile

In the pre-feasibility study (PFS) and scoping study, oxidised and partially oxidised material was excluded from the reported mineral resources and subsequently proposed mining and processing studies.

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

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

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

In the current drilling campaign, COB will undertake some preliminary drilling at these targets and further downhole geophysics as warranted.

COB’s staged campaign is initially focused on Pyrite Hill and infill drilling will target conversion of the indicated component, which represents 85% of the resource, to a measured classification.

READ: Cobalt Blue to investigate cobalt recovery potential at CuDeco’s Rocklands Project

Opportunities for resource growth will target down-dip extensions where the deposit remains open at depth below 50mRL, which is around 250 metres below the surface.

It is anticipated the rigs will be deployed to the Railway deposit in late November with the program sharing similar objectives to that of the Pyrite Hill drilling.

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

Water negotiations

In separate negotiations, Essential Water, a water retailer and distributor for the Broken Hill district, has indicated that 1.2 gigalitres per annum of raw water is available for the project.

A further 0.3 gigalitres per annum could also be supplied with a minor capital upgrade to the utility’s trunk main supply network.

The estimated water requirements specified in the COB’s PFS was 1.3 gigalitres per annum.

This does not represent a supply guarantee, but rather a milestone along the path to a formal service and supply agreement which will be negotiated when the project proceeds to commercial implementation status.

Quick facts: Cobalt Blue Holdings Ltd

Price: 0.12 AUD

Market: ASX
Market Cap: $19.19 m

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