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. 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 will be used 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
The tussle between Broken Hill Prospecting and Cobalt Blue has intensified, as Broken Hill refuses to contribute a 30% share of expenditure expected at the Thackaringa cobalt project.

The companies have been at odds over the way forward at the project since Cobalt Blue decided earlier this year to elect out of a farm-in agreement that would have required a completed bankable feasibility study (BFS) by mid-2019.

Instead, the company opted to retain a 70% interest in the project, leaving Broken Hill with a 30% share.

Cobalt Blue presented a budget in early November of A$9.6-million for the fourth quarter of 2018 to complete current drilling work at the project area, and to start a BFS.

While Cobalt Blue maintains that the joint venture (JV) partners have approved the parameters of the drilling programme under way at the project area, Broken Hill has said that actions taken by Cobalt Blue regarding the resolutions raised at the recent JV meeting are invalid or ineffective.

Broken Hill has issued Cobalt Blue with a formal notice that it does not wish to contribute to the JV activities and budget purportedly approved by the JV at the meeting, and maintains that it is under no obligation to pay a cash call amount.

Broken Hill has noted that in the event that the cash call is found to be valid, Broken Hill’s interest in the JV will be liable to be reduced in accordance with a dilution mechanism included in the JV agreement.

Broken Hill has said, meanwhile, that all drilling activities under way at Thackaringa will remain at the sole risk and cost of Cobalt Blue.

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.