Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) continues to make strong progress with its Broken Hill Cobalt Project in Far West New South Wales with the current focus on advancing a definitive feasibility study (DFS) incorporating adding value to the large cobalt resource.
The company has this week released an update in regard to its operations at Broken Hill encompassing progress with the DFS and has also recently conducted a successful capital raise.
A major component is the Demonstration Plant at which operations are on track to deliver the initial ‘process plant design criteria’ for the DFS by the end of the first quarter of 2023.
This Q&A with chief executive officer Joe Kaderavek details important points from the update.
You’ve just released an operational update, how is the feasibility study (FS) tracking?
We are well underway evaluating process plant design with the Demonstration Plant operations providing valuable efficiency metrics.
So far, we’ve completed mining from the underground portal, processed more than 4,000 tonnes of ore into 680 tonnes of concentrate which we are now treating in the pyrolysis and leach circuits.
Collection of concentrate into 1-tonne bulk bags with float concentrate on the left and gravity concentrate in the centre.
We’ll be producing Mixed Hydroxide Precipitate (MHP) throughout this month and in January we’ll run the leach and MHP circuits in continuous operation.
In summary, the Demonstration Plant is up and running and producing some very positive results. We expect the FS process to be complete by the end of Q3 2023.
That sounds very encouraging. Can you talk about these positive results and why they are relevant?
One of the first major milestones was proving the uplift in concentrate grade from an average ROM grade around 800ppm to an average of 4,400ppm.
This is a very important step in developing an economically viable project as upgrading the ore early in the processing significantly lowers cash costs in the subsequent steps versus laterite projects that are stuck as processing ROM-like grades through the refinery stage.
Operating spiral with separation of pyrite on the inner spiral and cutter gap, and gangue to outer edge of the spiral.
Last week we were able to show 95% cobalt recovery for concentration compared to 90% cobalt recovery achieved in the earlier 2020 Project Update. We couldn’t be more pleased with the achievements from our technology.
Given you are developing a major operation in Australia, do you have any insight into what is being seen on the ground in terms of inflationary costs?
Yes, we are at the stage of our feasibility study where the plant design is really starting to take shape, so we are holding significant discussions concerning supply of materials and construction of the project.
Generally, the recent inflationary environment started on the back of supply chain bottlenecks related to COVID. These are now largely resolved, with shipping routes now functioning normally.
We expect inflationary pressure to remain on people and power, rather than raw materials like steel. Further, given the 'relatively remote regional location', we are aiming to streamline construction where possible by the purchase of package equipment.
Kiln product separated into pyrrhotite for leaching (left side) and gangue (right side) for recycle to the float cell for recovery of unreacted pyrite.
There has been a lot of talk around the US Inflation Reduction Act, how has the introduction of this legislation impacted your project?
The IRA is already prompting a shift in strategies across the supply chain at incredible speeds. We’re seeing new partnerships building capacity, with over $30 billion of new investment in the US and with its partner countries.
Some of that investment is headed down here to Australia, for example, two major OEMs have made significant commitments to domestic mining projects over the past couple of months.
We only see benefits from the introduction of the IRA to our core business, which is selling battery-grade cobalt to IRA-compliant jurisdictions as well as supporting our aspirations to help develop a precursor or cathode active material industry here in Australia.
You recently underwent a capital raise, how do you intend to deploy the proceeds?
In addition to funding the DFS, the money will be used to advance activities through 2023 in parallel with work to complete the DFS.
For example, we will initiate Front-End Engineering Design (FEED) studies, to be executed post-delivery of FS.
Also, we will keep on operations staff beyond the FS test-work to retain a core of well-trained operators on staff through to commissioning of the Broken Hill Cobalt Project in late 2025.
Furthermore, we will continue to advance cobalt in waste streams opportunities where current test-work is expected to be expanded, potentially requiring larger-scale test work at the existing Demonstration Plant.
The expected development schedule for the Broken Hill Cobalt Project.