Mt Thirsty Cobalt-Nickel Project
The Mt Thirsty Project is located 16km northwest of Norseman, Western Australia. The Project is close to all necessary infrastructure (rail, road, power, gas, water, townsite, fibre optic and sea port) and, being in a mining orientated state, has the potential to attract a variety of interested parties including end users of cobalt. The Project is a 50/50 Joint Venture between Barra and Conico Ltd.
Cobalt-Nickel Oxide Deposit
The Project hosts the Mt Thirsty Cobalt Oxide Deposit (Table 1) which represents an excellent long-term, low cost, cobalt production opportunity.
The great advantage of Mt Thirsty compared to other potential cobalt operations is the nature of the resource, being a flat lying, continuous and thick deposit starting from near surface to around 70 metres below surface. Due to intense oxidation, the deposit is very soft, fine grained and low in silica.
Extensive metallurgical test work in recent years has indicated that high recoveries of cobalt can be achieved via an efficient low temperature, atmospheric leaching process which uses sulphur dioxide (SO2) as the preferred reagent, resulting in a more practical and economic leaching method by specifically targeting cobalt preferentially.
This Mineral Resource was first disclosed under the JORC code 2004. It has not been updated since to comply with JORC 2012 on the basis that the information has not materially changed since it was last reported. Refer to ASX announcement 8/3/2011.
Figure 1: Cross Sections through the Mt Thirsty Co-Ni Oxide deposit showing outlines of the mineralisation and weathering profiles
Pre-feasibility Study (PFS)
In 2017 the Mt Thirsty Scoping Study returned a preferred case Net Present Value (NPV) of A$290 million (within a range of A$245 million to A$335 million) over a 21-year mine life with a low capital cost of A$212 million (incl. A$34 million contingency). Life of mine operating costs are projected to be A$43 per tonne of treated ore due to the very low reagent consumption.
The study also showed that 73% of the cobalt is readily won through agitated atmospheric leaching using sulphur dioxide as a preferred reagent. This is a key competitive advantage for the project over many peers who require significantly higher capital to liberate cobalt and nickel through high pressure acid leaching. It is also why Mt Thirsty is so heavily leveraged to the rising cobalt price, with approximately 80% of all revenue forecast to come from cobalt with the balance from nickel.
The project is expected to produce 6,000 tonnes per annum of a Mixed Sulphide Product (MSP), a product of strategic interest to many multinational mining, refining and trading companies as it is suitable for the metals, chemical and battery markets.
The scoping study is the base case for the project, targeted to be significantly optimised in all areas, including metal recovery, during the PFS which kicked off in May 2018. AMEC Foster Wheeler Australia Pty Ltd (a Wood company) has been selected as the overall Study Engineer for the PFS. Wood will be supported by Snowden Mining Industry Consultants, Golder Associates Pty Ltd and Talis Consultants Pty Ltd as well as several other independent consultants in the field of geology, marketing and metallurgy.
Nickel Sulphide Mineralisation
In addition to the Cobalt-Nickel Oxide Resource, the Mt Thirsty Project has proven potential to host primary nickel sulphide mineralisation at greater depths within the same ultramafic sequence which hosts the near surface oxide deposit.
The thick sequence of altered olivine-rich, cumulate-textured ultramafic rocks contain semi-massive, stringer and disseminated nickel sulphide mineralisation. The footwall contact where the best concentration of nickel sulphides might be expected has been systematically tested with RC and diamond drilling. RC drilling to date has returned nickel sulphide intersections including 6m @ 3.4% nickel, 2m @ 5.9% nickel, 2m @ 3.5% nickel and 1m @ 4.0% nickel.
Longitudinal section showing nickel sulphide intersections.