Name of the Project
Thackaringa cobalt project.

Location
Western New South Wales, in Australia.

Client
Broken Hill Prospecting Limited (BPL 30%) and Cobalt Blue Holdings (70%).

Project Description
Thackaringa has proven and probable reserves of 46.3-million tonnes grading 819 parts per million of cobalt. Using the mining ore reserve, an initial mine life of 9.3 years has been delineated for the project. The mine is expected to produce about 3 657 t/y of metal in sulphate. Total life-of-mine production is estimated at 32 453 t/y of cobalt metal in sulphate.

A prefeasibility study (PFS) has proposed the development of the site through the exploitation of the Pyrite Hill, Big Hill and Railway cobaltiferous pyrite deposits using four opencut mining pits, a plant treating ore and producing cobalt sulphate heptahydrate crystals and associated by-products, a tailings storage facility (TSF) and supplementary infrastructure as required. The project will use openpit mining methods, adopting a conventional truck/excavator operation. The load-and-haul and drill-and-blast operations are proposed to be run by contractors.

The processing plant will have a capacity of 5.25-million tonnes a year, following commissioning. The proposed TSF is required to provide future capacity for the storage of filtered and compacted tailings from the extracted minerals of the pits on site. The project involves mining and processing with a production rate generating an estimated 4.8-million tonnes a year of tailings.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$792-million and an internal rate of return of 27%, with a payback of four years.

Value
Capital expenditure is estimated at A$550-million.

Duration
Not stated.

Latest Developments
Cobalt Blue has decided to delay the development of the Thackaringa cobalt project and maintain a 70% interest in the project rather than working towards full ownership.

Following the completion of a prefeasibility study (PFS) earlier this year, Cobalt Blue and its joint venture (JV) partner, Broken Hill Prospecting, appointed engineering firm Wood PLC to conduct a PFS gap analysis review.

The Wood review recommended a 24-month period to conduct bankable feasibility study (BFS) work on the Thackaringa project, which was well over the 12-month time line considered under the farm-in agreement timetable set up by the JV partners.

Cobalt Blue has concluded that attempting to fast-track the BFS studies to meet the farm-in timetable will “significantly impair” the project and will pose an “undesirable risk”.

Despite negotiations, the JV parties have been unable to agree on a suitable timeframe for the BFS work, with Cobalt Blue deciding to elect out of the earning period process of the farm-in agreement, which will have required a BFS by mid-2019.

Cobalt Blue is finalising a timetable for the feasibility studies to make an investment decision by the third quarter of 2020.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Cobalt Blue Holdings, tel +61 2 9966 5629 or email info@cobaltblueholdings.com.