Conico Advances Mt Thirsty Strategy Amid Greenland Contractor Dispute
Conico Ltd is exploring strategic options to enhance its Mt Thirsty cobalt-nickel project while navigating a significant arbitration ruling over drilling contracts in Greenland. The company also signals ongoing evaluation of new mineral exploration opportunities.
- Mt Thirsty JV partners investigating resource expansion and updated scoping study
- Arbitrator rules Conico and Longland jointly liable for C$1.05 million drilling dispute
- Company considering appeal and settlement options with drilling contractor
- Minimal exploration expenditure during the quarter, focus on project maintenance
- Board assessing new mineral exploration projects domestically and internationally
Strategic Review at Mt Thirsty
Conico Ltd (ASX: CNJ) continues to advance its Mt Thirsty cobalt-nickel-manganese-scandium project in Western Australia, held in a 50:50 joint venture with Horizon Minerals Ltd. The Board is actively investigating a range of strategic and technical options to increase the indicated JORC Resources, including further drilling campaigns. This effort aims to underpin an updated scoping study, revising the 2023 assessment which was withheld due to a high proportion of inferred resources impacting financial projections.
The Mt Thirsty project benefits from robust infrastructure and hosts a substantial cobalt-nickel resource, with promising scandium by-product potential identified in recent drilling. The company is also exploring process optimizations such as high-pressure acid leaching (HPAL) and the production of precursor cathode active material (pCAM), which could enhance project economics and market positioning amid rising demand for ethical battery metals.
Greenland Arbitration and Operational Impact
Meanwhile, Conico faces a challenging legal development in Greenland, where an arbitrator ruled that Conico and its partner Longland are jointly and severally liable for approximately C$951,420 (A$1.05 million) owed to drilling contractor Cartwright Drilling for services rendered during the 2022 field season. Additional liabilities for Longland related to Mestersvig drilling amount to C$391,247 (A$431,303). The counterclaim by Longland was dismissed.
Conico is actively considering an appeal and judicial review in the Supreme Court of Newfoundland and Labrador, while also pursuing a negotiated settlement. This dispute has contributed to subdued exploration activity and increased legal costs during the quarter, with exploration expenditure limited to project maintenance.
Exploration and Corporate Outlook
Beyond Mt Thirsty and Greenland, Conico’s Board is evaluating a pipeline of new mineral exploration opportunities both within Australia and internationally. The company signals readiness to pursue acquisitions or partnerships that align with its strategic growth objectives.
Financially, Conico reported a net cash outflow from operating activities of A$156,000 for the quarter, with cash reserves at A$88,000 by period end. The company acknowledges the need for additional capital to sustain operations and intends to raise funds during the financial year, expressing confidence in securing necessary financing.
Payments to related parties during the quarter were consistent with prior agreements, covering consulting, management, and legal fees. The company remains focused on managing costs prudently while resolving the Greenland dispute and advancing its core projects.
Bottom Line?
Conico’s next moves on Mt Thirsty resource expansion and Greenland dispute resolution will be pivotal for its near-term trajectory.
Questions in the middle?
- Will Conico successfully appeal the arbitration ruling and reduce its financial liability?
- How will the updated Mt Thirsty scoping study reshape project economics and development timelines?
- What new exploration opportunities might Conico prioritize amid tightening capital and market conditions?
