Highlights

  • A non-binding term sheet covers up to 1,000 tonnes a year of cobalt metal.
  • The proposed initial offtake term is three years, with an extension option.
  • A definitive agreement and financing for Kwinana remain outstanding.
  • Quarter-end cash was A$2.85 million.
  • Other studies continue at Broken Hill and Halls Creek.

Cobalt Blue Holdings Limited (ASX:COB) develops cobalt processing and critical minerals projects in Australia. Its October 2026 update centred on a proposed offtake arrangement for the planned Kwinana Cobalt Refinery in Western Australia, together with a September quarter cash balance and technical work at other projects. The proposed customer arrangement has not yet become a binding supply contract.

What the proposed Kwinana arrangement covers

On 19 October 2026, Cobalt Blue (ASX:COB) signed a non-binding term sheet with STG Metals GmbH covering up to 1,000 tonnes per year of standard-grade cobalt metal from the proposed Kwinana facility. The initial proposed term is three years, with an option for another three years. The maximum volume describes a contemplated arrangement, not a confirmed annual delivery obligation.

Pricing, contractual value and the date of a final investment decision were not disclosed. The parties still need to negotiate definitive terms and sign an offtake contract. Cobalt Blue (ASX:COB) also said discussions concerning project financing were progressing, without reporting agreed financing conditions. A final engineering and project study report remains part of the work required ahead of any investment decision.

Because the term sheet is non-binding, it does not establish customer receipts or committed refinery production. Any eventual supply depends on the contractual process and on development steps that had not been completed as of the update.

Cash and project financing context

Cash at 30 September 2026 was A$2.85 million, compared with A$4.27 million at the previous quarter end. Cobalt Blue (ASX:COB) reported A$1.20 million of operating outflow, A$0.13 million of investing outflow and A$0.09 million of financing outflow from loan and lease repayments. The company reported no undrawn facilities and estimated a funding runway of 2.24 quarters using the Appendix 5B methodology.

These figures describe the company’s funding position at the reporting date. They do not include unannounced future financing or contract revenue. The company identified a definitive offtake agreement and development financing as important dependencies for a Kwinana investment decision.

Broken Hill and Halls Creek studies

At its Broken Hill Cobalt Project, the company is evaluating a preliminary feasibility starter case of at least ten years, based on processing 2.5 million tonnes annually. The proposed development would initially draw on Pyrite Hill and later on Railway. A scoping report was expected in the December 2026 quarter to support the environmental assessment requirements process.

At Halls Creek, Cobalt Blue (ASX:COB) owns 51 per cent of a copper-zinc-silver project and is assessing a common heap leach route for the Onedin and Sandiego deposits. An updated scoping study was targeted for the December quarter. Further expenditure of A$1.5 million by 30 June 2028 could increase the company’s interest to 75 per cent, subject to the arrangement described in the update.

Technology testing and market dependencies

The Broken Hill Technology Centre produced graphite concentrate grading 70 to 85 per cent, subsequently upgraded in testing to more than 99.95 per cent. Electrochemical assessment of the material for battery anodes is planned. The company also participated in assessment work on a proposed US polymetallic nodule refinery, but the targeted processing scale had not been substantiated in the update.

Cobalt Blue (ASX:COB) highlighted cobalt price volatility, export policy and softer Chinese battery demand. These conditions, together with commissioning, funding and customer qualification, remain relevant to the proposed Kwinana development.

Key Insights

Cobalt Blue (ASX:COB) has outlined a potential route to cobalt metal customers, but its term sheet remains non-binding. The September cash position, unfinished financing discussions and pending engineering work establish the distinction between a commercial proposal and a project ready for investment approval. Other project studies remain separate from a decision to build the refinery.