Cobalt Blue Holdings Limited (ASX:COB) (OTCMKTS:CBBHF) (FRA:COH) has further de-risked the potential development of the Broken Hill Cobalt Project (BHCP) in Far West New South Wales by securing the allocation of groundwater.
The company has purchased a total of 650 unit shares for groundwater allocation within the Adelaide Fold Belt MDB Groundwater Source and Adelaide Fold Belt North Western Groundwater Source.
This will ensure the BHCP will comply with requirements of the Water Management Act 2000 for the estimated groundwater interception attributed to the proposed open cut mining operations.
A unit share is determined annually by the Minister for Water but is nominally 1 megalitre.
Building block for BHCP
This purchase represents a substantial building block for the BHCP and is one of the key deliverables of the BHCP Feasibility Study to attain the necessary approvals to construct and operate the project.
Existing groundwater allocation shares are limited and tightly held amongst a small number of licence holders within the Adelaide Fold Belt MDB Groundwater Source.
The allocation removes a project risk associated with the future purchase of sufficient groundwater share units at a reasonable cost to enable the BHCP to commence operations.
Regulatory requirement
COB’s CEO Joe Kaderavek said: “The purchase of this groundwater allocation delivers one of the regulatory requirements for the Broken Hill Cobalt Project.
“This de-risks the project by not having to purchase on market tightly held groundwater licences in the Adelaide Fold Belt MDB Groundwater Source.”
Groundwater sources at the Broken Hill Cobalt Project.
In accordance with the NSW Aquifer Interference Policy, the BHCP will be required to ensure that the necessary Water Access Licences are held with sufficient share component to account for all water taken from the groundwater sources as a result of an aquifer interference activity, both for the life of the activity and after the activity has ceased.
Water Access Licences needed
COB must also demonstrate in the BHCP Environmental Impact Statement (EIS) that sufficient water allocation(s) are available for the activity.
The proposed open cut mining activity will interfere with the groundwater resource, and therefore Water Access Licences with sufficient share components from the affected groundwater sources will be required.
Based on groundwater modelling, the BHCP has purchased 600 share units from the Adelaide Fold Belt MDB Groundwater Source and a further 50 share units from the adjacent Adelaide Fold Belt North Western Groundwater Source.
Further groundwater modelling will be undertaken in the EIS to comprehensively quantify the groundwater interception implication of the BHCP, however, this purchase is likely to be sufficient for the duration of the project.
Of strategic importance
From a strategic risk management perspective, the NSW Government only made available 78 unit shares in Adelaide Fold Belt MDB Groundwater Source in the Controlled Allocation Order (2020).
As such, securing 600 unit shares from this source where BHCP mining activities will occur is of strategic importance to the project.
The BHCP will make an application to WaterNSW to have the allocations attached to a Water Access Licence for the project.