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EYEBROW

29 September 2017
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Test edition

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EYEBROW

26 September 2017

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resourcestocks profile cobalt blue holdings

RESOURCEStocks Q&A: Cobalt Blue's Joe Kaderavek

Rising cobalt junior Cobalt Blue Holdings’ (ASX: COB) share price has quadrupled in the past two months on the back of positive scoping and metallurgical results. The company has an interesting few months ahead of it. Chief executive Joe Kaderavek explains why.

Partners > cobalt blue holdings

RESOURCEStocks Q&A: Cobalt Blue's Joe Kaderavek

Rising cobalt junior Cobalt Blue Holdings’ (ASX: COB) share price has quadrupled in the past two months on the back of positive scoping and metallurgical results. The company has an interesting few months ahead of it. Chief executive Joe Kaderavek explains why.

RESOURCEStocks Q&A: Cobalt Blue's Joe Kaderavek

Drilling at Thackaringa in New South Wales

RESOURCEStocks: Cobalt Blue has completed a significant 2017 second-half drilling program at Thackaringa, near Broken Hill in New South Wales - 75 drill holes including diamond (16) and RC (59); totalling approximately 13,000m. What's next?

Joe Kaderavek: The drilling was designed to close spacing to 50m and provide added confidence in grade continuity to allow a significant portion of the current inferred resource at each deposit to be upgraded to indicated resource. The work continues to add substantially to our geological understanding of Thackaringa, with its significant combined strike length of 4.5km and widths varying from 25m to 100m. We expect to have all drilling assays back by late January. These assays will enable a comprehensive resource modelling process to generate an indicated resource for the project by April 1, 2018. Our target is to achieve a 40Mt indicated resource (JORC 2012). This milestone will be shortly followed by a pre-feasibility study (PFS) to be delivered by mid-2018. 

RS: What other work is ongoing to feed into the PFS scheduled for delivery mid-2018?

JK: COB will be delivering a comprehensive PFS with a broad scope of work including drilling, geological modelling, mine planning, geotechnical analysis, environmental/ecological studies, hydrogeology, metallurgical test work, product assessment, marketing and financial analysis. Importantly for COB, the PFS will showcase the world class scale, longevity and economics of the Thackaringa cobalt project.

RS: What are the next steps on the sample testing front - you've said you're aiming to get battery-quality cobalt sulphate material ready for dispatch in Q1, 2018: when are you expecting to get market feedback?

JK: Our metallurgical test results have been very encouraging to date. We are currently processing over 800kg of test sample as part of PFS. The work has two broad objectives; namely to prove up the COB process targeting a battery ready product (cobalt sulphate) rather than a low value cobalt concentrate, and to produce enough cobalt sulphate to supply as purity samples to key global battery makers. These samples will be dispatched over the course of Q1 and we expect feedback shortly thereafter.

RS: What are you seeing as differentiators on the production/marketing side, for Thackaringa?

JK: Thackaringa has a sulphide orebody so our processing is somewhat simpler than a laterite. All mines operate at their ROM grade, but COB can recover 92% (via simple 1.2mm coarse crush and gravity separation) of this cobalt while deporting only 20% of this mass to a refinery. Think about that for a moment - refining is where the majority of production costs occur, and ours is processing only 20% of mined ore. That upgrade is not available to a laterite mine.

Our unique processing allows COB to adopt a more end customer marketing approach. In other words, directly to the battery industry. This lets COB target full metal value for our cobalt, but requires us to produce high quality samples in order to build relationships with new customers. Put another way, COB is disrupting the cobalt production chain by displacing chemical refineries. These refineries have 20-plus-year relationships with cathode makers (battery industry) based on being able to deliver tight material specifications. In order for COB to force its way into the production chain, we have to prove ourselves as a high quality supplier. The way to prove ourselves, in the first instance, is to produce sufficient scale of test samples so that customers can perform detailed technical evaluations of our product.

RS: What developments are you seeing in cobalt markets that are really getting your attention, and why - perhaps other than a US$74,500/t price level?

JK: The market remains tight but orderly. Supply is constrained, apart from near term DRC supply, which will ease into the market over 2018-19. Beyond that supply moderates. Norlisk remains on the sidelines with high cost cobalt (tailings reclaim). Demand is the great unknown, we estimate the physical market will double by 2025-30 led by battery cathode makers with (about 70-80%) of overall demand. The Asian processing triumvirate (China, Japan and Korea) are hunting ex African supply for the next 10 years. Cobalt Blue is focussed on pricing duration. Pricing will remain above trend to 2020-25 and bake in (previously unheard of) supply. That's our opportunity.

RS: Can you just recap your key investment points at this stage?

JK: Our target is to be the largest single mine source of cobalt outside of Africa. We're aiming to produce high purity, 20.5% cobalt sulphate - straight from the mine to the battery industry, with a primary cobalt mine - 80% of forecast revenue is cobalt - not a by-product, in a safe and stable jurisdiction.

 

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HEAD OFFICE:

DIRECTORS:

  • Robert Biancardi
  • Joe Kaderavek
  • Anthony “Trangie” Johnston
  • Hugh Keller
  • Matt Hill

SHARES ON ISSUE:

  • 85.88 million

MARKET CAP (at January 11, 2018):

  • A$61.84 million

MAJOR SHAREHOLDERS:

  • Top 20 holds 17.93%
  • Hill Family Group 8.6%
  • Zacob P/L 3.08%
  • Joe Kaderavek 2.9%
  • HSBC Custody Nominees (Australia) Ltd 1.4%
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HEAD OFFICE:

DIRECTORS:

  • Robert Biancardi
  • Joe Kaderavek
  • Anthony “Trangie” Johnston
  • Hugh Keller
  • Matt Hill

SHARES ON ISSUE:

  • 85.88 million

MARKET CAP (at January 11, 2018):

  • A$61.84 million

MAJOR SHAREHOLDERS:

  • Top 20 holds 17.93%
  • Hill Family Group 8.6%
  • Zacob P/L 3.08%
  • Joe Kaderavek 2.9%
  • HSBC Custody Nominees (Australia) Ltd 1.4%