Cobalt Blue Holdings Ltd (ASX:COB) has entered a partnership with LG International (LGI) aimed at sourcing long-term supplies of battery-ready cobalt from the Thackaringa Cobalt Project.
LGI is the resources investment arm of global giant LG Corp (KRX:003550) and will act in cooperation with LG Chem, one of the largest lithium-ion battery makers in the world.
LG Chem possesses strong technical leadership in the development of next-generation batteries, especially for fixed storage and electric vehicles (EVs).
Capital and technical assistance
Under the first mover partnership, LG will provide capital and technical assistance for Cobalt Blue to make a high-purity battery-grade cobalt sulphate from the cobalt project near Broken Hill.
Chief executive officer Joe Kaderavek said: “COB is excited to find a high-quality partner in LG and assist them in sourcing long-term supply of battery-ready cobalt.
“The technical competence of LG business is world-class and this partnership will add significantly to our project.”
Shares continue upward trend
Shares have continued an upward trend supported by strong news flow and have climbed almost 14% to be $1.39.5 intra-day, a new 12-month high.
READ: Cobalt Blue delivers resource upgrade at Thackaringa Project, paving the way for 70% stage II earn-in
Cobalt Blue has also executed a binding term sheet with LGI aiming to raise US$6 million with the transaction to be completed by Monday, April 16, 2018.
The company will issue shares at A$1.10 per share for the number of shares equivalent to the conversion rate on the day when the funds are received in its nominated bank account.
This represents a 15% premium to the 30-day VWAP of 95.4 cents and a maximum of 14 million shares may be issued.
READ: Cobalt Blue achieves high cobalt recoveries in tests of ore from Thackaringa project
Cobalt Blue’s strategy is focused on maximising payable cobalt from Thackaringa while participating in the strong growth of the lithium-ion battery market.
Unlike the traditional cobalt mining model, Cobalt Blue is an integrated refinery model delivering battery-grade cobalt sulphate at a premium to the cobalt price.
The company is seeking to produce premium cobalt sulphate that is suitable for tomorrow’s battery requirements and believes LG Chem represents a strong partner.
“Thackaringa project is unique”
Chairman Rob Biancardi said: “This is an important event for Cobalt Blue and its shareholders.
“It demonstrates that the Thackaringa project is unique and is one the most advanced cobalt projects of its type in the world.”
Cobalt Blue believes the project will be in production at a time when the current suite of cobalt-centred projects, predominantly out of Africa, will be at full production and an emerging deficit will be forming.
72% of resource in indicated category
The company this week released a resource upgrade for Thackaringa, which now comprises 72 million tonnes at 852 ppm cobalt, 9.3% sulphur and 10% iron for 61,000 tonnes contained cobalt at a 500 ppm cut-off.
The resource upgrade has also provided increased confidence with about 72% of the resource now classified as indicated.
READ: Broken Hill Prospecting and Cobalt Blue form cobalt alliance with LG International
A draft geological report has been submitted to joint venture partner, Broken Hill Prospecting (ASX:BPL), serving notice that it believes it has fulfilled stage I JV requirements.