Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) remains on track to complete a definitive feasibility study (DFS) for the Broken Hill Cobalt Project (BHCP) in Far West New South Wales by the end of the September quarter of 2023 and is buoyed by results being returned from the Demonstration Plant which exceed expectations.
This strong progress for the pure-play cobalt company coincides with signs of a cobalt price recovery amid improved liquidity as market transactions normalize following China’s reopening.
Demonstration Plant successes
The Demonstration Plant, which is located in Broken Hill, forms part of the DFS and COB’s move towards a commercial operation at the BHCP.
Operations at the Concentrator Circuit have been completed with the concentrate being treated through the kiln to convert pyrite into pyrrhotite and elemental sulphur.
The leaching circuit is now operational and the first production of Mixed Hydroxide Precipitate (MHP) has recently been achieved with large-scale commercial samples of up to 100 kilograms each to be released shortly for use by potential downstream partners.
“Exceeded our expectations”
Cobalt Blue’s chief executive officer Joe Kaderavek said: “We are proud of the achievements made by all the contributing teams into the DFS.
"The results from the Demonstration Plant have largely exceeded our expectations in terms of operations and outcomes, and we continue to optimise performance across the flow sheet.
"Overall technical studies continue to progress and de-risk the project, with initial independent engineering reviews now underway. These reviews are a key stepping-stone to eventual project funding.”
Concentrator Circuit work
COB processed 4,200 tonnes of ore from the BHCP through the Concentrator Circuit with 680 tonnes of wet concentrate produced.
During optimum conditions, the total combined recovery from the demonstration gravity circuit and bench-scale scavenger float tests on the gravity tails, was typically 93-95% cobalt into concentrate from the ore, which was in line with expectations from previous testing on drill core and RC chips.
Horizontal vacuum filter belt and pressure oxidation leach circuit.
Pyrolysis circuit
The Demonstration Plant process involves concentrate being treated through the kiln to convert pyrite into pyrrhotite and elemental sulphur with a typical hourly feed rate of approximately 150-300 kilograms.
COB’s ongoing optimisation of the kiln parameters has included changing temperature, feed rate, nitrogen flow rate and residence time.
Subsequent analysis of the samples by x-ray diffraction has confirmed conversion of pyrite to pyrrhotite across the particle size range.
Elemental sulphur is being stored, ahead of bulk processing into commercial prill form later in the test campaign.
Plant upgrades
As part of circuit commissioning approximately 5 tonnes of kiln calcine was leached. This followed a significant upgrade of the pilot plant leach size from 200 to 450 litres which increased throughput rates from 35 to 100 kilograms per hour.
First batches of Mixed Hydroxide Precipitate (MHP) from the BHCP Demonstration Plant.
Other upgrades included modifications to the feed pumping system, and the flash let down system to improve reliability and continuity of operations.
COB is now gearing this circuit to complete dedicated trials for the DFS detailed engineering requirements.
The leach liquor is treated for iron removal, ahead of cobalt and nickel recovery as a MHP. The first large-scale MHP production has recently been achieved and expected production rates are approximately 100 kilograms per 48 hours, based on the 100 kilograms per hour leach feed rate.
Mine site work
At the mine site to the southwest of Broken Hill, a resource definition, geotechnical and waste rock characterisation drilling program was completed in February 2023 and included:
- Dedicated geotechnical drilling to inform pit slope stability analysis for mine design and optimisation at the Big Hill and Railway deposits.
- Investigation of zones of potential resource extension at the Big Hill and Railway deposits;
- Infill drilling targeting improved resource classification at the Big Hill deposit; and
- Drilling for waste rock characterisation at the Pyrite Hill, Big Hill and Railway deposits, to inform detailed design criteria for the Integrated Waste Landforms (IWLs), which consider the progressive development of several IWLs where mine waste rock and process plant tailings are combined in a single facility for establishment of long-term physically and chemically stable landforms.
Reverse circulation drilling operations.
As well as determining acid and metal leachate generation characteristics of the waste rock and tailings, the drilling will aid in the installation of 19 new piezometers to measure groundwater characteristics at the site.
Sample processing is continuing with final assays expected to be received next month for the start of geological modelling and resource estimation.
Permitting progress
COB is also making progress with permitting, including an Environmental Impact Statement (EIS) and additional site-based surveys, assessing the project footprint, including soils, ecology, and Aboriginal heritage surveys.
For the EIS, substantial progress has been made in defining the disturbance footprint for the project.
DFS mining consultant, SRK, has completed the 'Approvals Case' mining study which in turn has largely determined the scope and scale of the project.
A map of the project layout with the location of open cut pits, Integrated Waste Landforms, processing plant and non-process infrastructure all having been determined.
The additional surveys include the land associated with the access road to the site from the Barrier Highway, the utilities corridor from Broken Hill to the site and revised locations of site infrastructure and IWLs.
A site inspection with officers from a number of NSW Government departments and Broken Hill City Council was held on February 21, 2023.
This included a comprehensive tour of the BHCP site as well as the Demonstration Plant and provided the opportunity for agencies to gain a first-hand appreciation of the scope and scale of the project, as well as the environmental, social and economic aspects.
Officers from the NSW Government and Broken Hill City Council with the BHCP approvals manager.
Cobalt in Waste Streams
COB is also continuing the Cobalt in Waste Streams Project (CWSP) as part of an MoU with the State of Queensland, acting through the Department of Resources to assess opportunities for the recovery of cobalt (and any co-existing base and precious metals) from mine waste.
Testing of the first sample from the Department of Resources was finalised in 3Q22 and test-work with a second sample from private company is in process.
Ongoing commercial discussions supporting the development of CWSP opportunities continue with prospective partners.
Partnering and financing
Another COB workstream is seeking a commercial partner or partners for the BHCP.
Multiple project partner and offtake discussions continue with the BHCP seen as commercially attractive and compliant with the respective Inflation Reduction Act (US) and Critical Raw Material (CRM) Acts (EU).
Market guidance from US Treasury and EU Commission respectively delivered this month is highly supportive of Australian extracted and processed cobalt.
The company is also continuing funding negotiations and has been buoyed by government support from the Australian Government’s Critical Minerals Accelerator Initiative with a A$15 million grant payable over time between December 2022 and March 2025.
CMAI funding will enable COB to accelerate the development of the BHCP by expanding the scope of the DFS, bring forward infrastructure and services work packages, and decrease start-up commissioning risks.
The company last month also received A$500,000 through the NSW Government’s Critical Minerals Activation Fund (CMAF) to be used for the environmental studies required in the EIS.
COB has also been awarded $20,000 from Austrade’s Export Market Development Grant, a program that helps Australian businesses grow their exports in international markets.
The expected development schedule for the Broken Hill Cobalt Project.
Improving market
Progress at the BHCP comes when the outlook for cobalt appears to be improving.
It is expected demand growth from the electronics segment will recover from this year as consumer patterns normalise.
Importantly, EV sales are forecast to remain very healthy, with energy transition analyst Rho Motion anticipating 4.1 million more EV sales in 2023 (39% YoY) growth vs last year’s 3.8 million sales.