KEY POINTSa This Strategic Update includes the:a Cobalt-Nickel Refinery (Refinery)a Broken Hill Cobalt Project (BHCP)a Cobalt in Waste Streams Projects (CWSP)a Cobalt Blue Holdings Limited (COB) (ASX:COB) is pleased to present the summary outcome of the Cobalt-Nickel Refinery Study (Study).a The Refinery is a proposed large-scale, cobalt-nickel operation representing Australia’s first cobalt refinery that will produce high-quality, battery-grade cobalt sulphate that is intended for IRA-compliant markets. It will be among the first large Allied Nation investments in cobalt refining for decades.a The Refinery is expected to establish COB as an early entrant into the emerging midstream segment of the Allied Nation Battery Supply Chain.a Stage 1 targets processing third-party feedstock with a capacity of 3,000 tpa cobalt sulphate and 1,000 tpa nickel sulphate. Stage 2 offers optionality for the inclusion of feedstock from the Broken Hill Cobalt Project (BHCP).a The Study presents a compelling evaluation of a cobalt and nickel refining business that is expected to generate stable margins throughout the highs and lows of the cobalt price cycle. On a 100% owned basis, the Refinery has the following financial metrics:a Preconstruction costs of A$10m.a Stage 1 of the Refinery has an estimated installed capital costof A$47m + A$7–9m contingency.a Stage 1 NPV10 (Long-term Assumptions) = A$118m returning (Post Tax) IRR = 27%a Stage 1 NPV10 (Spot Market Assumptions) = A$99m returning (Post Tax) IRR = 25%a We are engaged with a potential partner that owns a suitable property in the Kwinana district and expect to commence refinery construction next year. The potential partner is further determining an appropriate level of equity ownership in the Cobalt-Nickel Refinery via a funding contribution. COB will likely not own 100% of the project as a result of the partners' ownership. These negotiations are ongoing.a The advancement of the Cobalt-Nickel Refinery significantly de-risks the downstream portion of the BHCP. BHCP Feasibility Studies are progressing, focussing on finalising/optimising capital and operating estimates, with the Feasibility Study now likely to be delivered in April 2024.a CWSP projects are progressing with our recent update regarding FlinFlon Mine test QUOTE COB has positive news at last IMO
COB Price at posting:
28.5¢ Sentiment: Buy Disclosure: Held
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