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Cobalt Blue reaches new 12-month high on back of compelling cobalt story

Thackaringa project partner Broken Hill Prospecting (ASX:BPL) is leveraged to the company’s successes.
Cobalt sulphate crystals
The first (20% cobalt) cobalt sulphate crystals produced from the Thackaringa project

Cobalt Blue Holdings Ltd (ASX:COB) continues to ride high on the cobalt demand story and ongoing technical studies at its Thackaringa project near Broken Hill in far west New South Wales.

Shares reached a new 12-month high of 96 cents today, up almost 15% from Tuesday’s close and on volume of more than 1.4 million.

Since late October Cobalt Blue has risen five-fold and impending news flow should support the increased price.

Cobalt a key battery metal

Cobalt is a key ingredient in new-age batteries used for electric vehicles and energy storage, and prices have surged.

The LME cobalt price is more than US$80,000 a tonne, or about 150% higher than a year ago.

Cobalt Blue is the only primary cobalt play listed on the ASX, with the goal of becoming a top five global cobalt supplier annually producing 20,000 tonnes of cobalt sulphate with a greater than 20-year mine life.

READ: Cobalt Blue achieves high cobalt recoveries in tests of ore from Thackaringa project

Cobalt Blue’s ongoing tests have achieved high recoveries of cobalt from ore to leach solution from the project.

The tests are being carried out as part of a prefeasibility study (PFS) and have demonstrated total recovery of 88% cobalt from ore to leach solution.

They have also resulted in the production of the first cobalt sulphate crystals at 20% cobalt.

Test results will be used to conduct engineering studies and cost estimates.

The Thackaringa project is near the mining centre of Broken Hill.

Cobalt Blue expects to release an upgraded resource estimate for Thackaringa shortly and to complete the PFS by mid-year.

A bankable feasibility study will follow and this is scheduled for delivery in mid-2019.

READ: Broken Hill Prospecting readies aggressive growth and value-adding strategy in 2018

Joint venture partner in the Thackaringa project, Broken Hill Prospecting Ltd (ASX:BPL), is also leveraged to the cobalt story and Cobalt Blue’s progress.

The joint venture structure has Broken Hill holding 100% legal interest and 49% beneficial interest with Cobalt Blue holding the remaining 51% beneficial interest.

Cobalt Blue was spun out of Broken Hill to fully focus on the cobalt potential of Thackaringa.

Today Broken Hill is trading at up to 7.6 cents, an increase of 7% from Tuesday’s close and the Thackaringa venture provides exposure to major upside.

This exposure includes a 2% net smelter return royalty on cobalt production, which has potential to be a major earner for the company over many years.

READ: Cobalt Blue Holdings nets $100,000 from options as cobalt strategy advances

Subject to earn in milestones, Cobalt Blue can increase its beneficial holding and ultimately earn the legal title to the project.

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Cobalt Blue Holdings Ltd Timeline

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