Mixed Hydroxide Product (MHP) testwork delivers premium product.

Significant testwork outcome – strong hydroxide results ~37% cobalt and ~7% nickel content with low impurities = a premium product.

Significant MHP testwork results

In preparation for the upcoming Pilot Plant trials, COB has been advancing laboratory-scale testwork at ALS Metallurgy. As previously announced, a 45 tonne pilot concentrate trial was completed in early 2019, producing a 7.7 t concentrate sample (Concentrate Circuit (Pilot Trial) program successfully completed – 24 June 2019). A 200 kg sub-sample of concentrate was taken for the laboratory-scale process development testwork program.

COB has been actively optimising the processing unit operations to reduce iron, copper, zinc, manganese and calcium in the cobalt-nickel hydroxide intermediate precipitate. COB is pleased to provide the current elemental specification of the hydroxide intermediate, which will then be refined into high-purity cobalt sulphate.

The hydroxide precipitate was readily filtered from the chloride mother liquor, with residual moisture at 10 –15%. This contrasts with hydroxides precipitated from sulphate mother liquors, which are physically sticky and often contain 50–60% moisture, necessitating a dedicated dryer unit in addition to the filter.

The Market for Cobalt Hydroxides

Hydroxide intermediates represent approximately 75% of total global cobalt trade. The supply side of hydroxides is dominated by production from the Democratic Republic of Congo (DRC) whose contribution is expected to increase over the near term. Hydroxide intermediates are typically purchased by specialist refining companies.

Cobalt hydroxide intermediate is sold on a pricing formula with two components, prior to adjustment for penalty elements (impuri- ties). The first is the floating payables which is relative to the underlying cobalt metal price. The second is the cobalt content.

Fastmarkets quote prices for 30% minimum content cobalt intermediate hydroxide, with typical cobalt content of hydroxide from the DRC being 25 – 40%. Strong nickel credits will likely command a further payable metal for the COB MHP product. Overall, the extremely low level of impurities in the COB MHP product are considered attractive.

MHP and cobalt sulphate market description

In order to take advantage of prevailing cobalt market conditions, the Broken Hill Cobalt Project (BHCP) has a flexible production strategy. By adopting a metallurgical process which produces a commercially saleable intermediate product, the project will be able to optimise its suite of products to suit varying market conditions, taking advantage of MHP (50 – 80% cobalt payable) vs cobalt sulphate (90–110% cobalt payable) pricing.

The BHCP refinery will produce:

  • An intermediate MHP nominally containing 37% Co and 7% Ni. This high cobalt to nickel ratio is unique and is likely to command a premium sale price.
  • A final cobalt sulphate will be produced from further refining of the MHP. The target product specification is a >20.5% Co content sulphate crystal, suitable for use in cathode precursor manufacture.

Testwork update – Large scale furnace work scheduled May 2020 – on track

In addition to the MHP testwork described above, BHCP sample concentrate (7.5 tonnes) is currently being stored at ANSAC (ANERGY) in Bunbury WA in preparation for calcine (furnace) testwork. After thermal decomposition, this calcined material will be transported to the COB Pilot Plant (Broken Hill).

As part of the recently announced CRC-P Project, a large Pilot Plant trial will then be completed in Q4 2020. The calcined material will be used for leaching and metal recovery trials, whilst providing approximately 1 t of elemental sulphur for assessment by Mitsubishi Corporation.

However, the Company notes that the availability of personnel to run these trials may change if further measures related to social isolation in response to the COVID-19 pandemic are enacted.

Pilot Plant update – expected commissioning in Q4

A key stepping stone on the Company’s development path is to build a metallurgical testing centre in Broken Hill. This centre will scale from an initial Pilot Plant Operation (expected to be commissioned in Q4 2020, producing ~100 kilograms of cobalt sulphate from 90 tonnes of ore) to a subsequent larger scale fully integrated Demonstration Plant (producing 1 – 2 tonnes of cobalt sulphate using up to 2,000 tonnes of ore). The results will form the evidentiary basis for the engineering designs and cost estimates for the BHCP Feasibility Study. Pilot Plant equipment has now arrived on site in Broken Hill and is currently in the process of installation.

Ore Reserve Statement update on target for mid-year

COB has previously announced its intention to release an updated Ore Reserve Statement in mid-2020. COB expects this more optimised series of studies to significantly improve the economics delivered as part of the PFS in mid-2018. The Company targets a cash cost of US$10/lb (C1 basis – net of by-products) to produce cobalt sulphate. This will place the project in the lowest-cost quartile of cobalt projects globally. COB is pleased to reiterate that based on current guidance by independent consultants, COB will deliver an updated ore reserve statement by mid-year 2020.

Update - Cobalt Product Sample Program

COB has previously announced a Cobalt Product Sample Program (Cobalt Product and Sulphur Sample Program – 10 March 2020) using mixed hydroxide and cobalt sulphate from COB’s metallurgical testing centre. The aim of this program is to provide samples for technical and market assessments, to top-tier companies in the cobalt-for-battery supply chain. From late-2020, COB expects to ship samples to over ten partners, including cobalt trading companies and battery precursor manufacturers. Further market updates will be provided, subject to confidentiality agreements.

COB is pleased to announce that Sojitz Corporation has recently become a partner in the Cobalt Product Program. Sojitz is a leading Japanese general trading company, who have also taken active investments in operating mines around the world.