Cobalt Blue shares Pounded; Forfeits Ownership Of Cobalt Project After Missed Deadline

October 25, 2018 06:04 AM AEDT | By Team Kalkine Media
 Cobalt Blue shares Pounded; Forfeits Ownership Of Cobalt Project After Missed Deadline

On its Thackaringa cobalt project to meet a mid-2019 deadline, Cobalt Blue will not rush a final feasibility study – from its joint venture partner losing its chance to grab full ownership of the project. By mid-morning on the news, Cobalt Blue (ASX:COB) plummeted more than 20 percent to 23c. Suffering an 8 percent dip to 4.6c was its JV partner Broken Hill Holdings (ASX:BPL).

Cobalt Blue told investors, test-work demonstration plants and feasibility studies would take up to two years, a review of the project concluded. Into a period of only a year to meet the final feasibility timetable, the risk of attempting to fast-track such studies would significantly damage the project and pose undesirable risk.

The company told investors, after a period of negotiations leading to no acceptable commercial outcomes, subsequently Cobalt Blue has now elected out of the earning period process of the farm-in agreement. Company is unable to progress further as a result has elected to stay within the joint venture as a 70 percent partner and within the earning period provision in the farm-in agreement.Â

In a short statement to investors, the explorer said Broken Hill was considering the ‘legality, validity and practical implications of Cobalt Blue’s Notice. Further information may be provided in due course.

Before 30 June 2020 shelling out $10.9 million in project expenditure, Cobalt Blue could have earnt up to 100 percent and paying Broken Hill $7.5 million in cash and paying Broken Hill $7.5 million in cash.

2 percent profits of all cobalt produced would be received by Broken Hill. It has cash and cash equivalent of just $2.1 million at the end of June, Cobalt Blue had $9.7m. As at October 25, 2018 the stock of Cobalt Blue traded at a market price of $ 0.227 which is near its 52-week low and the performance change of 62.16% over the past 12 months.


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