This estimate along with ongoing metallurgical tests are part of a program of improving the already positive outcomes from a pre-feasibility study (PFS).
In this Q&A with Proactive Investors, Cobalt Blue’s CEO Joe Kaderavek comments on the resource upgrade.
Proactive Investors: What is the significance of the latest announcement?
Joe Kaderavek: Since listing in early 2017, COB has maintained a focus on growing the resource base to underpin a globally significant long-life cobalt project. In that time, COB has completed approximately 30,000 metres of drilling, and today we have declared a total mineral resource containing about 80,000 tonnes of cobalt at 889ppm cobalt equivalent grade.
This is a strong reward for our efforts and is a major milestone towards realising our target of a 20-plus year project life. The recent infill drilling program has allowed us to declare a maiden measured resource, which will underpin a future proven reserve statement.
Proactive Investors: Why have you amended the cobalt cut-off grade?
Joe Kaderavek: COB has developed and adopted a more appropriate cut-off grade for the deposits based on the results reported in the recently completed pre-feasibility study (PFS). In that study, the metallurgical test work confirmed that both cobalt and sulphur could be monetised from the deposit.
The independently prepared mining reserve from Mining One confirmed that the overall process and project evaluated in the PFS was technically and economically viable. Historically, a cut-off grade of 500ppm cobalt was used for the deposit, but now COB is using a 400ppm cut-off grade which includes value from both cobalt and sulphur.
Proactive Investors: Having completed the updated resource model, what are the near-term goals for COB?
Joe Kaderavek: Alongside the drilling campaign, COB has been progressing bulk scale metallurgical test work. A recent announcement outlined initial results from a concentrate trial using 45 tonnes of ore samples.
This will be followed up with subsequent releases, as the samples are progressed through the entire flowsheet to produce cobalt sulphate and elemental sulphur. A second 45-tonne sample is in storage in Broken Hill for additional pilot testing through 2019.
In parallel, we are continuing to progress environmental and permit approvals, building relationships with the community, reviewing mine waste and process plant tailings management strategies, and engaging with regulators and stakeholders.
Proactive Investors: You recently completed a roadshow in Asia – what were the outcomes?
Joe Kaderavek: COB has established a strong portfolio of relationships with key battery and resource industry participants across Korea, Japan and China, as evidenced by LGI’s investment in COB during 2018.
Widely accepted forecasts for cobalt deficits beyond 2023, continue to drive battery industry participants to seek new sources of cobalt. Therefore, there is strong interest in alternative sources of cobalt from countries with low sovereign risk.
In particular, Australian projects are actively being evaluated, with the COB project offering a uniquely simple primary cobalt operation. We believe that successful bulk scale test work to produce large quantities (100s of kilograms) of cobalt sulphate for battery testing, will be a strong catalyst for securing further commercial interest in our project.
In addition to marketing cobalt units, COB has commenced discussions for elemental sulphur. Sulphur represents about 20% of the revenue from the project, as reported in the PFS.
In Australia, around 1 million tonnes of sulphur is imported from Canada annually. This is mainly used for the on-site production of sulphuric acid for the fertiliser industry or for metallurgical leaching.
COB is aiming to produce 300,000-500,000 tonnes of sulphur for the life of the project. A summary of our project is shown below:
Proactive Investors: Thankyou Joe.