PERTH (miningweekly.com) – Cobalt developer Cobalt Blue on Monday announced plans to raise up to A$16-million in a share placement and non-renounceable entitlement offer to advance work on its Broken Hill project, in New South Wales.

The ASX-listed company has completed a private placement of 6.9-million new shares, at a price of 58c each, raising an initial A$4-million. The issue price represented a 12% discount to Cobalt Blue’s last closing price, and a 14% discount to the company’s 10-day volume weighted average share price.

The placement was done under the company’s existing placement capacity.

The company on Monday also announced a non-renounceable entitlement offer of one new share for every ten shares held, also at a price of 58c each, to raise a further A$10-million to A$12-million. The entitlement issue is not underwritten.

If the entitlement issue is fully subscribed for, more than 33-million new shares will be issued, and could raise as much as A$19.2-million.

Cobalt Blue said that proceeds from the raising, along with existing cash resources, will be used to fund activities into the second half of the 2023 financial year, in parallel with completing definitive feasibility work on the Broken Hill project. Funds will also go towards front-end engineering design studies, the maintenance of the Broken Hill demonstration plant and retention of operations staff beyond the testvwork which is likely to finish in the first quarter of 2023, in order to retain a core of well trained operators on staff through the commissioning period, which is anticipated in 2025.

The company will also assess cobalt-in-waste stream opportunities where current test work will be expanded, potentially requiring larger-scale test work at the existing demonstration plant, and the purchase of selective local commercial or industrial property to support future operations.

Earlier this year, Cobalt Blue Holdings was awarded A$15-million under the federal government’s critical minerals grant to accelerate a definitive feasibility study for its Broken Hill cobalt project, including final engineering designs, drilling for further resource definition, to produce intermediate and battery ready cobalt products in Australia.

The A$560-million Broken Hill project is expected to produce 16 700 t/y of high purity cobalt sulphate, which will be used in the manufacture of lithium-ion batteries. This production will build downstream processing capacity enabling the product to be fed into the global market’s growing demand for battery products. 

The project will also produce 300 000 t/y of elemental sulphur, which will reduce Australia’s dependence on imports for fertiliser production.