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Cobalt Blue delivers world-class cobalt product as Sojitz becomes sample partner

Test-work has produced strong hydroxide results with around 37% cobalt and 7% nickel content with low impurities. This represents a premium product.

Cobalt Blue Holdings Ltd - Cobalt Blue delivers world-class cobalt product as Sojitz becomes sample partner
The company intends to commercially produce a high-value, high-purity cobalt sulphate

Cobalt Blue Holdings Ltd (ASX:COB) has produced a premium, world-class mixed hydroxide product (MHP) in tests on ore from the Broken Hill Cobalt Project (BHCP) and has also secured leading Japanese general trading company Sojitz Corporation as a sample partner.

Laboratory-scale test-work being carried out at ALS Metallurgy in preparation for pilot plant trials has produced strong hydroxide results with approximately 37% cobalt and around 7% nickel content.

Exceeds industry benchmark

This MHP product, which also has low impurities, well exceeds the industry benchmark of 30% cobalt and represents a premium product.

In further encouraging news for COB, Sojitz has consented to be named as a partner in the company’s cobalt sample program using mixed hydroxide and cobalt sulphate from COB’s metallurgical testing centre.

The aim of this program is to provide samples for technical and market assessments to top-tier companies in the cobalt-for-battery supply chain.

From late-2020, COB expects to ship samples to over 10 partners, including cobalt trading companies and battery precursor manufacturers.

Sojitz consent welcomed

COB expects this program will generate substantial interest in the project with Sojitz participation an example.

Sojitz has also taken active investments in operating mines around the world.

These developments have seen COB’s share price increase by more than 28% to an intra-day high of 13.5 cents, up from 7.9 cents at close on March 24.

As part of the test-work, COB has been optimising the processing unit operations to reduce iron, copper, zinc, manganese and calcium in the cobalt-nickel hydroxide intermediate precipitate.

This is progressing well and the current elemental specification of the hydroxide intermediate will then be refined into high-purity cobalt sulphate.

Broken Hill Cobalt Project MHP assay results.

Reduced residual moisture

The hydroxide precipitate was readily filtered from the chloride mother liquor, with residual moisture at 10–15%.

This contrasts with hydroxides precipitated from sulphate mother liquors, which are physically sticky and often contain 50–60% moisture, necessitating a dedicated dryer unit in addition to the filter.

Hydroxide intermediates represent approximately 75% of total global cobalt trade and are sold on a pricing formula with two components, prior to adjustment for penalty elements (impurities).

The first is the floating payables which is relative to the underlying cobalt metal price and the second is the cobalt content.

Low impurity levels

Fastmarkets quote prices for 30% minimum content cobalt intermediate hydroxide, with typical cobalt content of hydroxide from the DRC being 25-40%.

Strong nickel credits will likely command a further payable metal for the COB MHP product.

Overall, the extremely low level of impurities in the COB MHP product are considered attractive.

In order to take advantage of prevailing cobalt market conditions, the Broken Hill Cobalt Project (BHCP) has a flexible production strategy.

By adopting a metallurgical process which produces a commercially saleable intermediate product, the project will be able to optimise its suite of products to suit varying market conditions, taking advantage of MHP (50-80% cobalt payable) vs cobalt sulphate (90-110% cobalt payable) pricing.

MHP vs cobalt sulphate markets.

Large-scale furnace work

In addition to the MHP test-work, a 7.5-tonne BHCP sample concentrate is being stored at ANSAC (ANERGY) in Bunbury WA in preparation for calcine (furnace) test-work which will take place next month.

After thermal decomposition, this calcined material will then be transported to the COB Pilot Plant which is being established in Broken Hill.

As part of a CRC-P Project, a large pilot plant trial is expected to be completed in the December quarter of 2020.

The calcined material will be used for leaching and metal recovery trials, while providing around 1-tonne of elemental sulphur for assessment by Mitsubishi Corporation.

Pilot plant in Broken Hill

A key stepping-stone on COB’s development path is to build a metallurgical testing centre in Broken Hill.

This will scale from an initial Pilot Plant Operation, which is expected to be commissioned in the December quarter of 2020 to a subsequent larger-scale fully-integrated Demonstration Plant.

The pilot plant will produce about 100 kilograms of cobalt sulphate from 90 tonnes of ore while the larger plant will produce 1-2 tonnes of cobalt sulphate using up to 2,000 tonnes of ore.

The results will form the evidentiary basis for the engineering designs and cost estimates for the BHCP Feasibility Study.

Pilot plant equipment has arrived on site in Broken Hill and is in the process of installation.

COB’s development timeline.

Reserve statement on-track

COB is also on-track to release an updated ore reserve statement for the BHCP in mid-2020.

This statement and the more optimised series of studies is expected to improve the economics delivered as part of a PFS in mid-2018.

The company is targeting a cash cost of US$10/pound to produce cobalt sulphate, which will place the project in the lowest-cost quartile of cobalt projects globally.

Quick facts: Cobalt Blue Holdings Ltd

Price: 0.1 AUD

Market: ASX
Market Cap: $15.99 m

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