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Thursday, October 25, 2018 - 1:51:23 PM
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Mining News Pro - The share price of ASX-listed Cobalt Blue fell by 25% on Thursday following the company’s decision to delay the development of the Thackaringa cobalt project, in South Australia, and to maintain a 70% interest in the project rather than working towards full ownership.
According to Mining News Pro -Following the completion of a prefeasibility study (PFS) earlier this year, Cobalt Blue and its joint venture (JV) partner, Broken Hill Prospecting, appointed engineering firm Wood PLC to conduct a PFS gap analysis review.
The Wood review recommended a 24-month period to conduct bankable feasibility study (BFS) work on the Thackaringa project, which was well over the 12-month time line considered under the farm-in agreement timetable set up by the JV partners.
Cobalt Blue said on Thursday that the company concluded that attempting to fast-track the BFS studies to meet the farm-in timetable would “significantly impair” the project and would pose an “undesirable risk”.
Despite negotiations, the JV parties have been unable to agree on a suitable time frame for the BFS work, with Cobalt Blue taking the decision to elect out of the earning period process of the farm-in agreement, which would have required a BFS by mid-2019.
“The Cobalt Blue board believes that to attempt to rush these studies, without proper diligence, is imprudent and not in the best interest of the Thackaringa cobalt project or Cobalt Blue’s shareholders,” the company said on Thursday.
“As a result, Cobalt Blue is unable to progress further within the earning period provisions in the farm-in agreement, and has elected to stay within the JV as a 70% partner.
“We, therefore, welcome Broken Hill as our 30% JV equity partner and look forward to developing the project with its assistance.”
Cobalt Blue is now finalising a timetable for the feasibility studies, with a view of making an investment decision by the third quarter of 2020.
The previously completed PFS estimated that the Thackaringa project would require a capital investment of A$550-million to develop a 5.25-million-tonne-a-year plant, producing 3 657 t/y metal in sulphate, and a life-of-mine total of 32 453 t, over a nine-year mine life.
Cobalt Blue shares were trading at a low of 20c a share, down from an opening price of 25c a share.
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https://www.miningnews.ir/En/News/287608
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