It could supply 2% of the global cobalt market, which the partners describe as the "most leveraged" battery mineral.

 

A prefeasibility study, based on a slightly larger 1.8 million tonne per annum atmospheric heap leach than the 1.5Mtpa option considered by the 2017 scoping study, would cost around A$371 million to develop, up from previous estimates of $212 million.

 

It would have all-in sustaining costs of US$35,400/t of contained cobalt after nickel credits, but is primed to take advantage of an expected rally in the cobalt price, thanks to a forecast rise in demand from electric vehicles and issues in the Democratic Republic of Congo, which dominates global cobalt supply.

 

Operating costs are high, but the PFS forecasts cobalt and nickel prices will rise to $61,000/t and $17,850 respectively, compared to current levels around $33,000 and $12,880.

 

The PFS includes maiden reserves of 26 million wet tonnes grading 0.126% cobalt and 0.54% nickel.

 

The project should produce 19,100t of cobalt and 24,800t of nickel in 9530tpa of a mixed sulphide product over 12 years of mine life, and deliver a post-tax net present value of A$25.7 million, the 18-month long PFS concluded. 

 

Mt Thirsty would derive 71% of its income from cobalt.

 

While the cobalt price has fallen precipitously since 2018, Barra and Conico consider current prices are at the bottom of the cycle, and is due for a recovery given the primarily source is as a by-product from DRC nickel and copper mines. 

 

Just three DRC mines were responsible for 42% of the market last year but Glencore's Mutanda closed in December, and the other two operations face their own issues, including the low pricing. 

 

Mt Thirsty could be a "sustainable, first world" source of supply, with the pair saying while the resource is the smallest of rival Australian options, the PFS suggests it has the lowest capex and highest cobalt revenue.

 

The PFS offered improved recoveries and lower costs over the scoping study based on additional metallurgical testing, with cobalt and nickel recoveries of 85% and 80% respectively.

 

There is value-adding upside from the on-site installation of nickel and cobalt sulphate plants, but the JV went for a simple, immediate value option for the PFS.

 

There is also a potential manganese stream, with 120,000t expected to be leached over the life of the mine, but more testing is required. 

 

With the PFS completed, the JV will look for a "large global firm, eager to secure a guaranteed sustainable source of cobalt" to farm-in or the sale of Mt Thirsty outright. 

 

Expenditure will now be scaled back on the project. 

 

Barra, which has $1.1 million cash, will focus on the Burbanks gold project near Kalgoorlie.

 

Conico is a single-project company, and has a partially drawn $500,000 debt facility with Barra. It has $269,000 remaining.

 

Barra was trading up 10% at 2.1c this morning, and was capitalised at $11.3 million, while Conico shares were up 25% to 1c, and was valued at $3.8 million.