Cobalt Blue’s Shares Rose Over 6.5% On ASX After Commencement Of Water Supply Pipeline To Broken Hill

Cobalt Blue Holdings Limited (ASX:COB) was incorporated in New South Wales, Australia on 26 August 2016. The company is trying to invest in energy storage (battery) technologies that may be a support to produce cobalt in commercialising battery and associated energy storage technologies.

WaterNSW with its project partners John Holland and MPC Group has successfully completed the construction and commencement of the water supply pipeline from the Murray River at Wentworth to Broken Hill which covers an area of 270-kilometre. Cobalt Blue Holdings today on 4 March 2019, complimented them for this achievement of the project.

The project involves long-term water security for the community since it can supply up to 37.4 megalitres of water per day to the Essential Water treatment plant at Broken Hill. The risks in the Thackaringa Cobalt Project will be reduced significantly owing to the provision of a secure source of water to Broken Hill. Essential Water has a commitment to supply up to 1.5 gigalitres of water per year to Cobalt Blue which will help to service the cobalt processing and refining requirements of the project.

As per the ASX announcement on 26 February 2019, Broken Hill Prospecting Limited wanted to negotiate an agreed path with Cobalt Blue Holdings Limited so that the Thackaringa Cobalt Project can be advanced. However, there was no success in this regard. The significant shareholder base between BPL and COB makes it important for the companies to continue in its endeavours. as per the announcement of CON on 18 February seeks to remove 4 of the 7 current disputes between the two parties from mediation and put them to an expert determination. This is an inappropriate given the nature of the disputes and BPL has formally given notice to COB to move to mediation.

BPL retains a beneficial interest of thirty percent in the Thackaringa Cobalt Project. It wholly owns the tenements where the project is based. BPL retains all base and precious metals rights with a 2% Net Smelter Royalty on all future production.

As per BPL’s proposal on 21 November 2018, it is of the opinion to restore value to the Project for both companies and their respective shareholders. It proposed an action plan with four steps to ensure the professional delivery of the Project, which includes the appointment of a respected, professional and independent manager. Secondly, correction of fundamental, technical and commercial deficiencies in the Pre-Feasibility Study (PFS) released in July 2018 while considering the current market conditions and a major correction in commodity prices in the battery space. Thirdly, jointly determining an appropriate scope and standard for the next stage of the project and finally, both companies utilising available cash resources effectively and controlling expenses to achieve these goals.

On the price-performance front, the stock of Cobalt Blue Holdings Limited last traded at $0.160 with an increase of ~6.667% during the day’s trade and with a market capitalisation of $18.69 million. The stock has generated a negative YTD return of 28.57% and posted negative returns of 67.03%, 30.23% and 9.09% over the last six months, three months period and one-month period respectively. It has a 52-week high price of $1.670 and a 52-week low price of $0.140 with an average trading volume of 192,011.

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