Thackaringa Pre-Feasibility Study Announced
Ore Reserve Estimate and Positive Pre-Feasibility Study (PFS) Results for the Thackaringa Cobalt Project
- Cobalt Blue Holdings Limited (Cobalt Blue or Company) has now delivered a PFS study for the Thackaringa Cobalt Project and spent a minimum of A$2.5m to achieve Stage 2 goals under the Thackaringa Joint Venture Agreement.
- Results justify proceeding further towards commercial development of the Thackaringa Cobalt Project. The project will now begin Bankable Feasibility Studies (BFS).
- A maiden Ore Reserve is declared for the Thackaringa Cobalt Project – Probable Ore Reserve of 46.3M tonnes @ 819 ppm cobalt.
The PFS clearly demonstrated the Ore Reserve case for Thackaringa was NPV positive and that the project was economic.
A Production Target (Potential Upside Mining Case) was modelled using sensitivity analysis. The Production Target of 58.7M tonnes @ 802ppm cobalt included the Probable Ore Reserve and a partial component of the Inferred Resource. Production Target outcomes are set out in Table 2.
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised.
- Completion of the PFS allows project financing negotiations to begin. A more detailed release on the objectives of the BFS, as well as the company’s exploration plans for the next 12 months will be released in due course. Strong cash balance of A$9.8m as of 1 July 2018.
- Demand for cobalt continues to grow. According to CRU, demand will increase by 7% pa CAGR 2018-2021 supporting a global deficit even after near term African supply has entered the market.
While Cobalt Blue is pleased with the PFS outcomes, there are four key opportunities for investigation in the BFS:
- Optimisation of process plant tailings handling and storage: In the PFS, management of tailings amounted to A$260M over the life of the project, inclusive of capital and operating costs. A review study will be undertaken in Q3 2018 to identify possible cost saving measures.
- Optimisation of metal recoveries: Design criteria used during the PFS was based on batch testwork. Larger scale testing will ccccccbe conducted during the BFS, incorporating recycle streams, which may increase overall metal recoveries.
- Optimisation of average power pricing: The PFS estimated that approximately 22% of the annual site cash costs were related to electrical power consumption from the National Electricity Market. Opportunities exist to consider onsite back-up power supply (larger scale batteries), and process plant operating philosophies, to limit consumption when the National Electricity Market prices reach short-lived peaks – intermittent peak pricing typically last for < 30 minutes.
- Opportunities to extend mine life: Potential to extend the project life by treating ore from inferred inventories from the known resources and from other sources beyond Thackaringa, represent opportunities for Cobalt Blue that would have significantly positive returns on capital if the Thackaringa project is developed.
Cobalt Blue’s Chairman, Rob Biancardi said: “We are pleased to announce the PFS results for the world class Thackaringa Cobalt Project. The PFS demonstrates the potential for COB to become a leading global supplier of cobalt sulphate to the lithium-ion battery industry. The Project will now move into a Bankable Feasibility Study. Further resource work will target a 20-year mine life, as the Production Target case is limited to under 13 years.”
BPL now holds the largest Mineral Sands tenement position in World-Class Murray Basin
Four new exploration licenses (EL006583; EL006584; EL006585; EL006614) with a combined area of 4163km2 granted in the Murray Basin, Victoria
- One exploration license (EL6139) granted in South Australia, along strike from Tararra (EL8558) in NSW
- BPL (through subsidiary Murray Basin Minerals Pty Ltd) is firmly established as the largest mineral sands tenement holder in the Murray Basin, with holdings of approximately 7300km²
- Exploration activities have identified multiple high-grade low-tonnage heavy mineral sands strandline deposits to support BPL’s mobile mining business model
- In depth technical data compilation, validation and infill drill program design has commenced on the new tenement areas
BPL’s Managing Director, Trangie Johnston commented:
“Mineral sands commodity prices continue to perform well, and we are seeing improved financial performance from existing mineral sands producers. The granting of four new exploration tenements with walk up resource targets places the Company in a strong position. We now have the critical mass to accelerate these projects at a time of strong underlying market conditions.”
NEW TENEMENTS GRANTED IN VICTORIA AND SOUTH AUSTRALIA
The granting of four new exploration licenses (EL006583; EL006584; EL006585; EL006614) in Victoria marks the expansion of BPL’s interest across the broader Murray Basin heavy mineral sands (HMS) province. Each new tenement areas hosts multiple parallel mineralised strandlines which in some instances persist over several kilometres of strike. The tenement areas are favourably located near key infrastructure and are characterised by strandline-type mineralisation encountered in reconnaissance drill traverses. Mineralisation persists up to 15km in strike in some areas with overburden varying between 5–20m in thickness.
The new tenements complement recently acquired holdings (EL8649; EL8650) in the Euston area of NSW. The next stage of BPL’s exploration workplan will see the newly-acquired areas undergo historical data validation and geological modelling as applied to the Jaws and Gilligans deposits in NSW. This work led to the estimation of Inferred resources of 113 Mt at 1.8% heavy minerals (MH) (10th August 2017).
An additional tenement (EL6139) has been granted in South Australia. EL6139 contains the Oakbank, Boxwood Dam and Johnsons Dam strandline HMS deposits where preliminary (informal) resource estimates have been undertaken by previous explorers. These potential resource areas are located along strike from mineralisation in the company’s NSW tenements including the Tararra strandlines (EL8558).
Thackaringa Cobalt Shaping up as a world class deposit
The BPL tenements at Thackaringa, held in joint venture with ASX Listed Cobalt Blue Holdings Ltd (ASX:COB) cover near surface, very large cobalt deposits. The project is advancing towards the delivery of a PFS by June 2018, after which time it is expected that the project will move into a full, bankable feasibility study.
Quarterly Report for the quarter ended 30 June 2017
Exceptional Infrastructure supports the Thackaringa Project – the deposits are located beside the main trans-Australian railway, have excellent road access and are only 30 minutes drive from the mining City of Broken Hill (first class mining service industries, technical workforce, housing and community facilities. Excellent power and water supply options will support project development and proximity to Broken Hill will obviate the need for an accommodation camp or FIFO facilities.
Ownership Rights - BPL currently owns 100% of the legal interest in Thackaringa; COB holds 51% beneficial interest and can, on meeting certain milestones, retain that interest and ultimately move to 100% legal and beneficial interest.
To do so, apart from meeting project milestones, COB must also pay $7.5 million to BPL and pay a 2% net smelter return royalty on all cobalt production to BPL. BPL’s announcements provide more details on the ownership structure and joint venture terms.
Broken Hill Prospecting Limited (BPL) is a mining and exploration company that is seeking, in joint venture with Cobalt Blue Holdings Ltd, to develop the significant Pyrite Hill, Big Hill and Railway cobalt deposits located 25 kilometres south-west of the world famous mining centre of Broken Hill in western New South Wales.
The deposits are geologically unusual because they do not occur as a bi-product with richer copper or nickel deposits, as is the case in nearly every other mine around the globe. Cobalt, therefore, would be the main focus of any mining development.
Rising demand for cobalt: BPL consider that the increasing use for cobalt in future technology advances such as battery development for rechargeable automobile batteries, super alloys, aircraft, space technology, wind turbines and solar energy will see a rapid growth in cobalt demand and an increasing interest in BPL’s large and well located cobalt deposits.
Production bottleneck of cobalt production: Cobalt mine production is dominated by bi-product copper mines (Democratic Republic of the Congo) and nickel deposits. Thackaringa offers an opportunity to invest in future cobalt production with low political and technical risk.
Advantage over laterite cobalt deposits: Because the Thackaringa cobalt mineralisation occurs within pyrite (FeS2), it can be readily concentrated to a pyrite concentrate which contains about 0.5% cobalt. This is not possible for laterite deposits which typically have cobalt grades of <0.05%.
Sulphur will be a valuable co-product: Further processing of the concentrate to produce cobalt will also provide sulphur and high iron residue. Sulphur is widely used in manufacture of fertiliser and in numerous industries as well as for many mineral processing operations and will add considerable value to future development scenarios. Other possible co-products include sodium feldspar and quartz which could be used in porcelain/tile manufacturing.
Broken Hill Base, Precious and Industrial Minerals Growing a multi-commodity position at Broken Hill BPL is leveraging off it’s strong presence in the Broken Hill region by acquiring a developing a suite of quality base, precious and industrial mineral projects.
An active exploration programme is planned for these projects during 2018.
Potential for zinc lead and silver: BPL’s exploration at Thackaringa has located 13 potential occurrences of Broken Hill style mineralisation (rich in zinc, silver and lead). Several of these have best potential for underlying mineralisation which may be of economic grade. One drill hole at the Railway prospect intersected base metal mineralisation containing up to 3.5% zinc and 15g/t silver over several metres width.
Mineral Sands Projects Subsequent to the successful divestment of non-core mineral sands assets in mid 2017 for over $3milion, BPL has retained a portfolio of mineral sands projects in the world class Murray Basin region, south of Broken Hill.
BPL has an experienced team Board of Directors and Executives who have an impressive track record of mineral discovery and development.
CREAGH O’CONNOR: CHAIRMAN
AM, FAIM, FAICD
Creagh has approximately 40 years experience as a chief executive and board member for a number of public and private companies. During this time he has been involved in managing a number of Australian and international oil, gas and mineral projects.
Creagh is an experienced board member and his most public role was with Cricket Australia as Director for 11 years and Chairman from 2005 to 2008. In addition he was Director of South Australian Cricket Association (SACA), Director of the International Cricket Council, Director of the Kerry Packer Cricket Foundation, Director of Rundle Capital Ltd, Governor of the Bradman memorial fund, Chairman of the Lords Taveners, Trustee of the Les Favell Foundation and Chairman of ACHA Health Ltd.
He is currently a director of A G O’Connor Pty Ltd and chairman of the Maurice de Rohan International Scholarship Fund.
TRANGIE JOHNSTON: MANAGING DIRECTOR
BSC (HONS), MSC, AUSIMM
Trangie Johnston is a geologist with 21 years’ experience in exploration, project development and mining activities. His diversified career spans the private, public, consulting and government sectors, with experience extensively throughout Australia and internationally.
He is currently a director of Cobalt Blue Holdings and has previously held corporate and senior management positions at KBL Mining Limited, MM Mining Limited, Compass Resources Limited and SRK Consulting Pty Ltd.
Trangie is experienced in a diverse range of ore deposit types, commodities and operations and has a sound understanding of geo-scientific, metallurgical and engineering principles. He has previously implemented programs for resource and reserve expansion through maiden discoveries and deposit extensions across the base and precious metals, bulks, energy and rare earth markets.
GEOFFREY HILL: NON-EXECUTIVE DIRECTOR
BEC, MBA, FCPA, ASIA, FAICD
Geoff was a director of BPL from 1989 to June 2014, and re-joined the board on 27 August 2015. He has extensive experience in the identification and implementation of mergers and takeovers and has acted for a wide range of corporate clients in Australia and overseas. Mr Hill also has extensive experience in providing corporate advice to mining companies.
He is Chairman of the International Pacific Securities Group. He is Chairman of the ASX Limited, Pacific American Coal Ltd and Asian Property Investments Ltd. He is a previous Chairman of Mount Gibson Iron Ore Limited and a Director of Talisman Gold Mines Limited.
MATTHEW HILL: NON-EXECUTIVE DIRECTOR
MBA, AFSL, FFIN, APDT
Matthew has over 20 years experience in financial services and investment banking. He is currently the Chief Executive Officer of New Talisman Gold Mines Limited (formerly Heritage Gold NZ Limited). Matthew is an experienced merchant banker having worked previously at Potter Warburg, Eventures (a joint venture between Newscorp and Softbank), Pitt Capital and Souls Private Equity Limited. Matthew specialises in resource and company listings on the ASX and NZX and acts for a number of multinational clients. Matthew holds a Graduate Diploma in Applied Finance and Master of Business Administration. He is a fellow of the FINSIA and a member of the Australian Institute of Company Directors.
DENIS GELDARD: NON-EXECUTIVE DIRECTOR
Denis has over 40 years technical and operational experience in mineral exploration and project development in Australia and internationally. He has over 20 years experience in the Heavy Mineral Sands Industry with companies such as Western Titanium Ltd, Associated Minerals Consolidated and Iluka Resources.
Denis is a Mining Engineering graduate from the Kalgoorlie School of Mines in Western Australia. He has managed and run a number of junior and mid-tier mining and exploration companies and mining operations over the past 40 years including directorships of a number of Australian listed mining and exploration companies.