Koongie Park JV Raises Questions on Metallurgical Challenges and Project Pace
AuKing Mining has entered a strategic joint venture with Cobalt Blue Holdings, enabling COB to earn up to 75% of the Koongie Park copper/zinc project through staged expenditure, while AuKing reallocates focus to its gold and uranium assets.
- Cobalt Blue can earn up to 75% interest in Koongie Park via $2M expenditure over 3 years
- COB brings metallurgical expertise critical for advancing project feasibility
- COB issues $200k in shares to AuKing as part of JV establishment
- JV expenditure maintains project tenures, freeing AuKing to focus on Cloncurry gold and Mkuju uranium
- AuKing retains minimum 25% interest, preserving significant stake in Koongie Park
Strategic Partnership for Koongie Park
AuKing Mining Limited (ASX: AKN) has formalised a new joint venture agreement with Cobalt Blue Holdings Limited (ASX: COB) focused on the Koongie Park copper/zinc project in north-eastern Western Australia. This JV arrangement grants COB a two-stage earn-in right to acquire up to a 75% interest by committing $2 million in project expenditure over three years.
The partnership is designed to leverage COB’s metallurgical expertise, a critical factor given the polymetallic nature of Koongie Park’s deposits. AuKing’s Managing Director Paul Williams highlighted that COB’s involvement will be instrumental in progressing the project beyond the scoping study phase towards feasibility studies, addressing key metallurgical challenges identified in 2023.
Financial and Operational Implications
As part of the JV, COB will issue $200,000 worth of ASX-listed shares to AuKing, which will be held in escrow for six months. The staged earn-in requires COB to spend $500,000 by mid-2027 to secure an initial 51% interest, with a further $1.5 million expenditure by mid-2028 to increase their stake to 75%. Should COB fail to meet expenditure targets, AuKing retains buy-back rights to maintain a controlling interest.
This arrangement ensures that the Koongie Park tenements remain in good standing through active expenditure, relieving AuKing of tenure maintenance costs and allowing it to concentrate financial resources on its other priority projects, notably the Cloncurry gold and Mkuju uranium ventures.
Project Background and Resource Base
Koongie Park hosts a substantial polymetallic resource, with a combined JORC 2012 resource estimate of 21.1 million tonnes across the Sandiego, Onedin, and Emull deposits. These deposits contain significant copper, zinc, lead, silver, and gold grades, underpinning the project’s economic potential.
AuKing’s prior work included extensive drilling campaigns and metallurgical testwork, culminating in a June 2023 scoping study that outlined an 11-year mine life, $134 million capital expenditure, and a pre-tax NPV8 of $177 million based on conservative copper price assumptions. The study also forecasted a robust 39.7% internal rate of return and strong operating cash flows.
Looking Ahead
With COB’s metallurgical capabilities and committed funding, the Koongie Park project is poised to advance into feasibility studies, a critical next step in unlocking value. AuKing’s retained minimum 25% interest ensures it remains a significant stakeholder, positioned to benefit from any upside as the project matures.
For AuKing, this JV represents a strategic pivot, enabling it to prioritise development of its other high-potential assets while ensuring Koongie Park’s momentum is maintained by a partner with complementary strengths.
Bottom Line?
The Koongie Park JV sets the stage for a metallurgical breakthrough and feasibility progress, with AuKing balancing risk and focus across its portfolio.
Questions in the middle?
- Will Cobalt Blue meet its staged expenditure commitments to fully earn-in?
- How will COB’s metallurgical expertise translate into improved project economics?
- What timeline and milestones can investors expect for the upcoming feasibility studies?
