A$8.797m loss and A$4.265m cash shape Cobalt Blue’s FY2026

Kwinana clears technical and regulatory hurdles

Cobalt Blue Holdings Limited (ASX:COB) has moved its Kwinana Cobalt Refinery closer to a potential final investment decision, but the project remains dependent on commercial agreements and new funding. Samples produced at the company’s Broken Hill Technology Centre met the stringent trace-metal purity and physical specifications required under its pre-FID consortium deed with Iwatani Australia, while Western Australia’s Department of Water and Environmental Regulation granted the refinery Works Approval.

The qualification milestone is significant because cobalt sulphate meeting prospective battery precursor buyer specifications is a condition linked to the refinery’s pre-FID process. Cobalt Blue says additional samples have been requested and that production and assessment will continue alongside offtake negotiations. Letters of intent from prospective buyers in the United States, Japan and France, together with Iwatani’s 30% share of product offtake, cover about 70% of the proposed initial 3,000 tonnes per annum capacity. Those commitments remain non-binding.

The company’s November 2025 project update put the Stage 1, 100%-owned Kwinana case at an after-tax NPV8 of A$155 million and an after-tax IRR of 32%, compared with A$90 million and 23% respectively in the October 2024 estimates. The updated configuration assumes cobalt hydroxide feedstock and a product mix of cobalt sulphate and cobalt alloy-grade metal. Cobalt Blue is still working to convert letters of intent into binding offtake contracts and is seeking support from the Australian Government, export credit agencies, banks and potential investors.

Loss widens as the funding runway remains limited

The financial statements show the central tension in the annual report. Cobalt Blue’s loss increased to A$8.797 million from A$6.099 million, while revenue and other income fell to A$1.230 million from A$2.864 million. The result included a A$4.313 million non-cash fair-value loss related to the Lind placement agreement; excluding that item, total expenses fell by A$3.249 million, helped by lower employee and Kwinana project costs.

Cash at 30 June 2026 was A$4.265 million, up from A$1.224 million a year earlier, after A$7.092 million of net financing inflows. The company issued 142.6 million new shares during the year and raised A$7.727 million net of costs, adding to a capital structure that stood at 587.5 million ordinary shares at year-end. It has no material operating revenue and states that it is unlikely to generate such revenue until one of its proposed projects, or its black-mass processing opportunities, is commercialised.

That is why the going-concern disclosure matters more than the headline cash balance. Management’s cash-flow forecast assumes further equity or grant funding, potential income from licensing intellectual property, a partial sale of licence interests and cost reductions. The directors said they had reasonable grounds to expect continued access to funding, but the financial report acknowledges a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern. BDO issued an unmodified audit opinion while drawing attention to that uncertainty.

Broken Hill reset enters feasibility work

Cobalt Blue has started a Preliminary Feasibility Study for the Broken Hill Cobalt Project, shifting from its previous large-scale concept to a smaller, staged development intended to reduce upfront capital intensity and execution complexity. The study is targeting a starter case with a minimum 10-year mine life and is assessing lower requirements for water, power, workforce and supporting infrastructure. The project retained Australian Government Major Project Status for another three years in July 2025.

Technical work includes concentration testing on oxide-transition material and mine planning by SRK Consulting. The company says its draft Environmental Impact Statement is about 80% complete, with major studies substantially advanced. A scoping report to support the project’s environmental assessment requirements is targeted for submission in the fourth quarter of calendar 2026, while the development application remains subject to satisfactory PFS outcomes.

Halls Creek and processing technology broaden the portfolio

At Halls Creek, Cobalt Blue is testing whether material from the Onedin and Sandiego deposits can be processed through a single heap-leach operation rather than the more complex pathway previously envisaged for Sandiego. About 870 kilograms of material has been collected for metallurgical work, including potential silver recovery. An updated Scoping Study is targeted for the fourth quarter of 2026, after which the company intends to progress to a PFS. Cobalt Blue has retained a 51% interest and exercised its right to earn up to 75% by spending a further A$1.5 million by 30 June 2028.

The Broken Hill Technology Centre is also being used to test battery black mass as a possible Kwinana feedstock and to develop graphite recovery with CSIRO. Separately, the consortium with Glomar Minerals is pursuing a proposed US facility capable of processing about 200,000 tonnes per annum of polymetallic nodules. That work is expected to take 18 to 24 months, but is subject to appropriate funding and binding agreements formally engaging Cobalt Blue.

The next decisive evidence will not be another study-stage ambition but conversion: binding Kwinana offtake, a financing package and a credible path to FID. Until those pieces arrive, the company’s expanding technical platform and improved cobalt market may offer optionality, but they do not remove the balance-sheet question identified in the accounts.