Cobalt Blue's (ASX:COB) shares have climbed 4% intra-day to $0.285 on very high volume following the first assays from the 2017 drilling program at Thackaringa.
The news flow in coming weeks and months will remain strong as more assays flow through.
Joe Kaderavek, CEO, commented: "The drilling results are above expectations as we continue to identify high grade zones."
Highlights at Railway include:
- 48 metres at 1,045ppm cobalt from 30 metres;
- 42 metres at 1,615ppm cobalt from 28 metres;
- 25 metres at 1,232 ppm cobalt from 35 metres; and
- 26 metres at 1,456 ppm cobalt from 71 metres.
Highlights at Pyrite Hill include:
– 52 metres at 840ppm cobalt from 95 metres; and
– 23 metres at 1,392ppm cobalt from 127 metres.
These results will boost the Thackaringa resource, with an update expected in mid-2017.
Cobalt Blue has already outlined a target to triple the Inferred resource, which is currently 33.1 million tonnes at 833ppm cobalt (at a 500ppm Co cut-off).
Importance of cobalt
Cobalt is a specialty metal used in rechargeable batteries, specifically in the cathode – its properties allow it to store power for longer.
Demand for the metal has pushed the price higher to trade over $US50,000 per tonne recently.
Car makers are driving the demand for cobalt, with many analysts questioning where the supply will come from.
This positions Cobalt Blue as a potential company to supply to the forecast shortfall.
Analysis
The results reinforce the substantial cobalt and pyrite development opportunity at Thackaringa.
The news flow will remain strong as assays continue to be released.
Upcoming share catalysts over the next 6-months include: Resource upgrade; Scoping Study to outline global mine potential; and first economics.