Cobalt Blue Holdings Ltd. said July 4 that a pre-feasibility study for the Thackaringa cobalt project in New South Wales, Australia, outlined a posttax net present value, discounted at 7.5%, of A$544 million, an internal rate of return of 22% and a 4-year payback period.
The results justify proceeding further towards commercial development of the project, which will now begin bankable feasibility studies, the company said.
Cobalt Blue is earning up to a 100% ownership in Thackaringa from Broken Hill Prospecting Ltd., in which it secured an initial 51% stake after completing the first stage of the deal. Broken Hill, which conducted a scoping study in 2017, did not disclose the specific results.
The updated study was based on a March resource estimate update, in the combined indicated and inferred categories, of 61,500 tonnes of cobalt contained in 72 million tonnes grading 852 parts per million of cobalt, using a 500 ppm of cobalt cut-off, at the Railway, Big Hill and Pyrite Hill deposits. A maiden ore reserve of 46.3 million tonnes at 819 ppm cobalt in the probable category was also declared.
In addition, an average price of US$33.80 per pound of cobalt sulfate was incorporated as its basis. Total plant CapEx came in at A$550 million, including a provision of A$66 million for contingency.
The ASX-listed cobalt explorer envisages production of 3,558 tonnes per annum of cobalt at a C1 cash cost of US$11.90 per pound, based on a plant throughput of 5.25 million tonnes per annum, which supports an initial 12.8-year operation.
Negotiations for the financing of the project will now begin following the positive pre-feasibility study. The explorer outlined opportunities for further investigation for a future bankable feasibility study on the project, including the optimization of the process plant tailings handling and storage, improved metal recoveries and mine life extension.