Australia's Cobalt Blue Plans Shared Processing Plant to Develop Two Deposits at Halls Creek

en.Wedoany.com Reported - On November 10, Australian mining company Cobalt Blue Holdings released an updated scoping study for its Halls Creek copper-zinc-silver project in Western Australia, planning phased development of the Onedin and Sandiego deposits and construction of a shared processing facility at Onedin to produce copper cathode, zinc oxide and silver bullion. The study estimates initial capital expenditure of A$75 million, a pre-tax net present value (10% discount rate) of approximately A$317 million, a pre-tax internal rate of return of approximately 47%, and an expected mine life of approximately 11 years.

The project adopts a development sequence of open-pit mining first, followed by underground mining. Phase 1 involves mining the Onedin deposit using open-pit mining and heap leaching; Phase 2 transitions to underground mining at the Sandiego deposit, with ore transported via the Great Northern Highway to Onedin for processing. Separate heap leach pads will be built at each deposit, each designed with a heap leach feed capacity of approximately 55,000 tonnes per month, with leach solutions centrally piped to the shared processing plant at Onedin.

The processing plant will sequentially recover silver, copper and zinc, ultimately producing three products: silver bullion, copper cathode and zinc oxide, with the processed solution recirculated back to the respective heap leach systems. The updated plan eliminates the previously proposed dedicated flotation plant for Sandiego, instead using shared heap leach and metal recovery facilities. The project is designed to produce an average annual output of approximately 4,000 tonnes of copper cathode, 13,000 tonnes of zinc-containing zinc oxide product and 130,000 ounces of silver over an expected mine life of approximately 11 years, plus approximately one year of initial construction.

This study incorporates silver recovery from both the Onedin and Sandiego deposits into the project economic evaluation for the first time. Based on life-of-mine revenue estimates, copper, zinc and silver account for 56%, 37% and 7% respectively. The base case adopts long-term price assumptions of US$13,007 per tonne of copper, US$3,086 per tonne of zinc and US$50 per ounce of silver, with an AUD/USD exchange rate assumption of 0.70.

Initial development capital is estimated at A$75 million, with subsequent development capital of approximately A$116 million and additional sustaining capital of A$6 million, for total development and sustaining capital of approximately A$197 million. The study assumes that cash flow generated from Phase 1 Onedin production will support subsequent development of Sandiego, with a payback period of approximately 3 years from first production. Life-of-mine pre-tax free cash flow is estimated at approximately A$681 million.

Cobalt Blue currently holds a 51% interest in the project, with joint venture partner AuKing Mining holding the remaining 49% through its wholly-owned subsidiary Koongie Park. Cobalt Blue has exercised its option to increase its stake, planning to raise its project interest to 75% by committing an additional A$1.5 million in exploration and tenement-related expenditure by June 30, 2028.

In the next phase, Cobalt Blue plans to advance the project to pre-feasibility study, targeting completion in the first half of 2028. The work will include verification of Sandiego heap leach performance, silver recovery rates and zinc oxide product quality, heap leach pad design, geological and hydrological investigations, mine design optimization, production scheduling and shared processing plant engineering design, as well as environmental baseline surveys, heritage assessments, native title-related negotiations and approvals.