Cobalt Blue builds momentum across refinery and critical minerals portfolio

Kwinana secures offtake pathway before financing decision

Cobalt Blue Holdings Limited (ASX:COB; OTC:CBBHF) has secured a commercial foothold for its proposed Kwinana Cobalt Refinery, but not yet the financing or binding sales contract needed to build it. A non-binding term sheet with STG Metals GmbH covers up to 1,000 tonnes a year of standard-grade cobalt metal over an initial three-year period, with an option to extend for another three years.

The term sheet was signed after the September quarter and remains subject to negotiation and execution of a definitive offtake agreement. Cobalt Blue says the arrangement supports its initial plan to begin Kwinana with cobalt metal production and sales while cobalt sulphate continues through qualification programs with end-users. The company’s offtake discussions were previously reported as covering a proposed ramp from 500-750 tonnes in the first year to 800-1,000 tonnes in years two and three, but construction, qualification and board approval remain outstanding.

Financing work is progressing alongside the offtake process, while engineering documentation, feedstock assessments and updated vendor pricing are being folded into a final project study ahead of a final investment decision. That sequencing is significant: the quarter delivered a clearer commercial framework, but Kwinana remains a development project rather than an operating asset.

Cash position leaves limited room for delay

The quarter’s numbers add a harder edge to the development story. Cobalt Blue used A$1.200 million in operating cash and A$128,000 in investing activities, while debt repayments and lease liabilities absorbed a further A$85,000. Cash and cash equivalents fell from A$4.265 million to A$2.852 million during the three months ended September.

Using total relevant quarterly outgoings of A$1.273 million, the Appendix 5B calculates 2.24 quarters of available funding, with no unused finance facilities. The company did not provide the additional responses required for entities below two quarters of funding, because its reported estimate remained above that threshold. That does not resolve the longer-term funding question: Kwinana financing is still being developed, and the company has not reported production or development revenue.

Broken Hill study tests a smaller starting point

At the Broken Hill Cobalt Project, the preliminary feasibility study has advanced a starter development case designed to reduce upfront capital while preserving expansion options. The strategic mine-planning assessment uses the Pyrite Hill and Railway deposits, with a conceptual schedule beginning at Pyrite Hill and bringing Railway into the mine plan later.

The case is based on a nominal processing rate of 2.5 million tonnes a year and a minimum 10-year starter period. About 95% of the mineralised material within the selected optimisation pit shells is classified as Measured and Indicated Resources; Cobalt Blue specifically cautions that this proportion is not a production target. Waste-landform options, including potential backfilling of the Pyrite Hill pit, will receive further assessment through the PFS.

Environmental work is being aligned with the developing mine plan, with the BHCP Scoping Report expected to be submitted in the December quarter to support an application for Secretary’s Environmental Assessment Requirements. A development application remains subject to satisfactory PFS outcomes, leaving the project’s next regulatory step dependent on the technical study.

Technology centre broadens graphite and third-party work

Cobalt Blue’s Broken Hill Technology Centre produced a graphite concentrate containing 70-85% graphite from battery black mass in collaboration with CSIRO. CSIRO then applied its purification process to upgrade the concentrate to a battery-grade specification above 99.95%. The next phase will test electrochemical performance in battery anodes, so the result is a process milestone rather than evidence of commercial sales.

The centre is also supporting Cobalt Blue’s Halls Creek testwork and Project Infinity, the proposed US polymetallic nodule refinery being developed with Glomar Minerals. The company has now been formally contracted to provide metallurgical testwork, flowsheet development, cost estimation and US site evaluation for the project’s preliminary economic analysis, targeted for completion in the fourth quarter. That contract follows the earlier Project Infinity study contract, which put the US refinery into formal PEA work but left it at an early evaluation stage.

Halls Creek moves toward updated scoping study

At Halls Creek, heap-leach testwork is examining copper, zinc and silver recovery across Onedin and Sandiego material, including blends intended to test whether both deposits could feed a common operation. Cobalt Blue says that route could simplify development and reduce processing complexity compared with the earlier concept of underground mining and separate copper and zinc concentrates.

The company is targeting an updated Scoping Study in the December quarter. It has also lodged documentation to transfer a 51% interest in the project tenements after satisfying the expenditure condition under its earn-in agreement, while pursuing a 75% interest through a further A$1.5 million of expenditure by 30 June 2028. Registration of the transfer is still being progressed, making the ownership position an administrative milestone rather than a completed change.