Key Highlights

  • The revised plan processes ore from Onedin and Sandiego through one common plant at Onedin.
  • Staged development Capital totals A$75 million, with Cash Flow from Onedin assumed to fund Sandiego.
  • The study includes silver recovery from both deposits for the first time.
  • On a 100 per cent project basis, the study estimates a pre-tax NPV of about A$317 million.

Cobalt Blue (ASX:COB) Holdings has released an updated scoping study for its Halls Creek base metals project in Western Australia's Kimberley region, replacing a study published in mid-2025. The revised plan would put material from both the Onedin and Sandiego deposits through a common processing plant at Onedin, recovering copper, zinc and silver.

The study outlines staged development capital of A$75 million. Under the staging approach, cash flow from Onedin is assumed to fund the development of Sandiego, which would reduce the upfront capital needed before production begins. For the first time, the study includes silver recovery from both deposits.

Headline economics

On a 100 per cent project basis, the study estimates a pre-tax net present value of about A$317 million and a pre-tax internal rate of return of 47 per cent. Life-of-mine free cash flow is put at A$681 million.

The ratio of estimated life-of-mine free cash flow to staged development capital is notable for a project of this size, but scoping-level numbers should always be interpreted with caution. They depend heavily on metal price assumptions, recoveries and operating costs, and small changes in any of those can shift outcomes materially.

Why the common plant matters

Building a single processing Facility to treat ore from two deposits can lower capital and operating costs compared with separate plants, and it can extend the life of the facility by drawing on more than one source of feed. The trade-off is the cost of hauling material from Sandiego to Onedin and the need to manage ores that may behave differently in processing.

Adding silver as a third recovered product broadens the Revenue base. Polymetallic projects with copper, zinc and silver can benefit from Diversification across commodities, though they also carry the complexity of producing and Marketing more than one product.

Ownership and joint venture

Cobalt Blue holds a 51 per cent interest in the project under a joint venture with Koongie Park, a Subsidiary of AuKing Mining (ASX:AKN). The company has exercised an option to increase its interest to 75 per cent by spending a further A$1.5 million on exploration before June 2028. Because the economic figures are stated on a 100 per cent basis, Cobalt Blue's attributable share would depend on its interest at the time of any development and on joint venture funding arrangements.

Limitations and next steps

A scoping study is an early-stage assessment with a relatively low level of accuracy. It is not a pre-feasibility or feasibility study and does not establish ore reserves.

Development would also require funding, approvals and agreement between the joint venture partners. The staged model's reliance on Onedin cash flow to fund Sandiego means any delay or underperformance at Onedin could affect the timing of the second deposit.

In the near term, the clearest disclosed commitment is the exploration spending required for Cobalt Blue to move to 75 per cent of the project before June 2028. Investors will be looking for further detail on study assumptions and on how the company intends to progress Halls Creek alongside its other activities.