PERTH (miningweekly.com) – The tussle between joint venture (JV) partners 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, in South Australia.
The two companies have been at odds over the way forward at the Thackaringa project since Cobalt Blue earlier this year decided 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 in early November presented a budget 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 maintained that the JV partners approved the parameters of the current drilling programme under way at the project area, Broken Hill on Friday said that actions taken by Cobalt Blue in relation to the resolutions raised at the recent JV meeting were invalid or ineffective.
Broken Hill has issued Cobalt Blue with a formal notice that it did not wish to contribute to the JV activities and budget purportedly approved by the JV at the meeting, and maintained that it was under no obligation to pay a cash call amount.
The company noted that in the event that the cash call was found to be valid, Broken Hills interest in the JV would be liable to be reduced in accordance with a dilution mechanism included in the JV agreement.
In the meantime, Broken Hill has said that all drilling activities under way at Thackaringa would remain at the sole risk and cost of Cobalt Blue.