Broken Hill Prospecting’s joint Thackaringa cobalt project with Cobalt Blue has received strong results from its pre-feasibility study (PFS), indicating the project to be low-cost, high-purity, globally significant source of cobalt sulphate.
The PFS finding aligns favourably with the significant increase in cobalt use observed in the market recently, as cobalt is a necessary metal in the production of the high-density lithium-ion batteries that help to power electric vehicles.
Broken Hill managing director and chief executive Trangie Johnston said, “Cobalt Blue’s PFS demonstrates a robust project with excellent commercial metrics and potential for improvements as the project moves through bankable feasibility studies.”
Last November, Cobalt Blue allocated $2.5 million in investor funds to pay for in-house cobalt sulphate purity testing at the request of potential South Korean, Chinese and Japanese battery industry partners.
In late 2017, the project’s second drilling also delivered a 31 per cent increase in total tonnes and a 23 per cent increase in contained cobalt compared with its mineral resource estimate in June 2017.
The Thackaringa cobalt project is under a farm-in and royalty agreement with Cobalt Blue: the latter paid Broken Hill $7.5 million in cash, and will have to commit $10.9 million in project expenditure by the end of June 2020.
Should Cobalt Blue fulfil its obligations, it will then be entitled to 100 per cent ownership of the project. Meanwhile, Broken Hill will receive 2 per cent smelter royalty on all cobalt produced from the Thackaringa tenements for the entire life of the mine.