Cobalt Blue Holdings Ltd (ASX:COB) recently announced a First Mover Strategic Partnership with LGI which provides a direct pathway for battery-ready cobalt from the Thackaringa Cobalt Project near Broken Hill.
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.
Chief executive officer Joe Kaderavek comments exclusively to Proactive Investors on the significance of the partnership.
Proactive Investors: What is the significance of this announcement?
Joe Kaderavek: Confidence in the project is building through progressive feasibility studies.
Our recent commercial visits to Asia confirmed strong interest in the Thackaringa Cobalt Project.
From these expressions of interest, the COB Board was able to choose the best foundation partner for our project and that partner is LGI.
Proactive Investors: What is the first mover partnership?
Joe Kaderavek: The first mover partnership is essentially a relationship milestone.
COB is looking for a long-term partner to provide capital and technical assistance going forward.
Investors are aware that COB has ambitious strategic goals that include producing battery quality cobalt sulphate for the next generation of lithium-ion cells. This has profound margin and cash flow implications for our business.
COB will enter the global production chain and compete with entrenched long-dated relationships.
A world-class partner, such as LGI and its sister company LG Chem, is exactly what COB needs to successfully enter this market.
Proactive Investors: Tell us about your partner
Joe Kaderavek: Investors readily identify with LG as a premium global brand. LG International, however, executes resources investment strategy for the LG Group.
Historically, LG International has specialised in global mining investment and operations and has now extended its focus to include 'Green Minerals', the raw materials of lithium-ion battery construction such as cobalt, nickel and lithium.
LG International operates in close cooperation with LG Chem to secure materials for the LG Group overall.
Proactive Investors: Why do you need a technical partner?
Joe Kaderavek: Globally, only a few emerging cobalt developers have ever produced a 20% cobalt sulphate crystal and this demonstration of expertise is opening doors.
For COB, the focus is on battery-grade cobalt in the 2020s and our choice of partner is very important.
Our vision includes two important outcomes:
1. Extract the strongest margins from our cobalt over the life of the Thackaringa Cobalt Project; and
2. Minimise the risk of technological obsolescence. One thing is certain, today’s standard will change, and possibly quite radically, into the future as large-scale energy storage changes our lives.
Proactive Investors: What key milestone news flow should investors look for in 2018?
Joe Kaderavek: We will be releasing our pre-feasibility study (PFS) by mid-year 2018. We are very excited to be delivering the project PFS, as it will showcase the size, longevity and value of the world-class Thackaringa Cobalt Project.
Key project milestones - PFS mid-2018 and bankable feasibility study (BFS) mid-2019.