Cobalt Blue (ASX: COB) outlines A$121m post-tax NPV for Halls Creek copper-zinc project in WA scoping study

Cobalt Blue Holdings Limited (ASX: COB) has unveiled the findings of a scoping study for its Halls Creek Project in Western Australia, detailing a dual-stage development with a forecast 10.5-year life-of-mine and a post-tax net present value (NPV) of A$121 million. The study positions the asset as a capital-efficient, near-term copper and zinc production opportunity for the Australian mining and mineral processing firm, complementing its existing strategic focus on cobalt through the Kwinana Refinery and Broken Hill Cobalt Project.

What are the key findings from the Halls Creek scoping study?

The scoping study outlines a two-phase development strategy for the Halls Creek Project. Stage one involves an open-pit operation at the Onedin deposit, using heap leaching to produce copper cathode and zinc sulphate monohydrate. Stage two will develop the Sandiego deposit through underground mining and flotation to generate separate copper and zinc concentrates. Over the life of the mine, the project is expected to produce 52,400 tonnes of copper, 118,900 tonnes of zinc, and more than 380,000 ounces of silver on a 100% basis.

Initial capital costs are projected at approximately A$73 million, with an additional A$67 million in working capital required, also on a 100% basis. Cobalt Blue Holdings Limited currently owns a 51% interest in the project through a farm-in joint venture with Koongie Park Pty Ltd, a wholly owned subsidiary of AuKing Mining Limited. The Sydney-based developer retains the right to increase its interest to 75% by spending an additional A$1.5 million before June 2028.

How does Halls Creek fit into Cobalt Blue’s diversified strategy?

Cobalt Blue Holdings Limited is best known for its critical minerals focus, including the development of a cobalt-nickel refinery in Kwinana and the Broken Hill Cobalt Project in New South Wales. The Halls Creek Project provides diversification into base metals with strategic relevance to the energy transition. Copper, a key material in electric vehicles, grid infrastructure, and AI data centres, and zinc, increasingly utilised in energy storage and galvanised steel, both feature prominently in the project’s production targets.

From a portfolio perspective, Halls Creek enhances Cobalt Blue’s resilience across commodity cycles. Institutional observers noted that the addition of copper and zinc exposure may improve the Australian developer’s capital access by broadening its appeal to generalist investors during periods of cobalt market softness.

What are the project’s economics and capital requirements?

On a 100% basis, the project demonstrates a pre-tax NPV (8% discount rate) of A$172 million and an internal rate of return (IRR) of 28%. Post-tax figures fall to A$121 million NPV and 21.4% IRR. These projections assume long-term copper prices of USD$10,022 per tonne and zinc at USD$2,780 per tonne, based on consensus estimates from brokers including Macquarie, Jefferies, and BMO.

The Onedin portion of the project is expected to contribute A$298 million in copper sales and A$185 million in zinc sales over five years, while Sandiego is projected to generate A$483 million in copper revenue, A$216 million in zinc sales, and an additional A$8 million from silver. Operating costs at Onedin are pegged at A$4.59 per tonne of combined process feed and waste, while underground mining costs at Sandiego are significantly higher at A$77.34 per tonne.

Key capital items include A$73 million for the Onedin processing plant and site infrastructure, A$43 million for Sandiego plant construction, and A$106 million in underground mine development. Shared infrastructure—including a solar-battery hybrid energy system and site access roads—adds another A$27.9 million to the project’s overall cost base.

What does the production profile look like across the two deposits?

The Onedin deposit will be mined via open-cut methods, delivering up to 1 million tonnes per annum (Mtpa) of ore to a heap leach facility. Solvent extraction and electrowinning will produce up to 5,000 tonnes of copper metal annually, while a separate crystallisation circuit will generate 15,000 tonnes per annum of contained zinc in zinc sulphate monohydrate. In total, Onedin is expected to produce 19,400 tonnes of copper and 59,000 tonnes of zinc over its life.

The Sandiego deposit, developed as an underground mine, will deliver 700,000 tonnes per annum to a concentrator. Processing will yield copper concentrate containing 25% copper and zinc concentrate with 51% zinc. Annual average production is projected at 7,300 tonnes of copper, 13,300 tonnes of zinc, and over 84,000 ounces of silver. Total life-of-mine recoveries include 33,000 tonnes of copper, 59,900 tonnes of zinc, and 380,000 ounces of silver.

What infrastructure and ESG features are planned?

A hybrid energy system using solar photovoltaic (6 MW/hr) and lithium iron phosphate battery storage (36 MWh) will supply up to 2 MW flat load to the site. Diesel generators will provide redundancy during low-sun periods and support the mining fleet. The project’s water needs are expected to be met largely through in-pit water sources, supplemented by a bore field and pipeline network.

In terms of environmental and social governance (ESG), the site currently faces minimal biophysical constraints. However, further Aboriginal heritage and environmental baseline assessments are planned in upcoming study phases. Mining leases M 80/276 and M 80/277 fall within the Koongie-Elvire Native Title determination area, and renewal processes beyond 2031 will require engagement under the Native Title Act.

What is the institutional view on funding and execution risk?

Cobalt Blue Holdings Limited has a history of securing equity financing for its critical minerals initiatives and may pursue a similar strategy for its share of the Halls Creek Project. The company has signaled that equity, or a combination of equity and debt, will be used to fund its contribution to Stage 1. Notably, the staged development approach allows cash flow from Onedin to support Sandiego construction, thereby reducing overall external funding pressure.

Still, the project remains at an early stage. While scoping studies often signal intent and potential, investors typically look for conversion to a pre-feasibility or definitive feasibility study before ascribing substantial value. Analysts tracking Australian mid-cap miners have also flagged the possibility of project dilution if Cobalt Blue Holdings Limited elects to partially divest its interest to fast-track development.

The reliance on inferred resources, although minor (~9%), introduces a degree of geological risk, and the absence of defined offtake partners may limit the project’s attractiveness to financiers until commercial agreements are in place.

What are the forward milestones for Halls Creek?

Cobalt Blue Holdings Limited expects the next development milestone to be a pre-feasibility study, incorporating further metallurgical testing, mine design, and updated costing. The decision to mine is anticipated around 2028, with first production potentially commencing thereafter, subject to financing and approvals.

The project’s timeline aligns with expected strength in copper demand driven by electrification trends and sustained infrastructure spending. Zinc’s outlook, while less pronounced, remains supported by its essential role in galvanised steel and potential use in long-duration battery chemistries.

If successfully advanced, the Halls Creek Project would provide the Australian mining developer with a near-term revenue stream that could complement its longer-term cobalt ambitions, offering a hedge against single-commodity exposure while benefiting from the same structural demand tailwinds driving the energy transition.