Cobalt Blue Holdings Limited PFS: Further Details on Potential Project Financing

Sydney - Cobalt Blue Holdings Ltd. (ASX:COB) (OTCMKTS:CBBHF) (Company) refers to the Pre-Feasibility Study (PFS) announced to the ASX on 4 July 2018.

The quantum of funding required to produce the Bankable Feasibility Study (BFS) is currently the subject of a budgeting process which has not been finalised. The projected costs from the BFS stage until the operations stage are outlined in the capital costs described in the announcement made yesterday. The Company has considered a range of options for funding prior to and during the expenditure of capital costs. It is anticipated that finance will be sourced through strategic partnerships, including the use of debt and equity - see the LGI discussion below. The Company Board is confident it will be able to obtain the funding to complete the BFS without difficulty. The Company Board considers that it has reasonable grounds for project financing and availability of funding as set out in the announcement made yesterday, including:

COB Commercial Strategy - Maximise the Margin

The Thackaringa Cobalt Project strategy is to examine an integrated mine/refinery concept. Traditionally, cobalt mines have sold cobalt as a byproduct of either copper or nickel and received a fraction of the value of the contained cobalt. Cobalt Blue's strategic focus is upon the battery industry and producing a battery ready cobalt product (cobalt sulphate) at sufficient purity to enter the production chain directly. This allows Cobalt Blue to sell directly into the battery industry (specifically to cathode precursor manufacturers representing the front end of the industry). The long-term commercial strategy is to extract the maximum cobalt margin. This is detailed in the announcement made yesterday.

COB Processing Technology - Commercial Acceptance - World Class Partner

The Board and management have a strong track record of attracting partner interest and attracting new capital - refer to the 2 successful raisings in the past 8 months, including US$6 million from LGI, detailed in the following paragraph.

COB has previously announced (23 March 2018) a Strategic First Mover partnership with LG International (LGI), which was also summarised in the announcement made yesterday. LGI is the resources investment arm of LG Corporation, acting in cooperation with LG Chem. LG Chem is one of the largest lithium ion battery makers in the world. LG Chem possesses strong technical leadership in the development of next generation batteries, in particular for fixed storage and Electric Vehicles (EVs). LG Chem is also one of the leading EV battery makers globally. Under the First Mover partnership LG will provide capital and technical assistance to COB.

There are also specific results of the PFS which the Company considers make the project particularly attractive to third party strategic partners:

Attractive Project Returns

Thackaringa Cobalt Project capital costs are estimated at $A550 million (including $A66 million in contingencies) and approximately A$24 million in pre strip. The (Production Target) project return is A$544 million delivering an IRR of 22%, well in excess of commercial cost of capital assumptions.

The Thackaringa Cobalt Project (Production Target) has a payback period of less than 4 years. Examining capital intensity (US$/t cobalt production), at approximately US$115K per tonne, the project is a standout amongst its global peer group.

Project Operating Costs - Economically Resilient

The PFS delivered an operating cost (C1 US$/lb - net of sulphur) of ~US$12.80/lb of cobalt. This is before the upcoming cost optimisation studies (tailings and power). The Company believes that US$10-12/lb is a world class benchmark and provides economic resilience (the ability to operate under depressed market conditions). The (real) cobalt price has dropped below US$12/lb only once in the last 40 years. This is detailed in the announcement made yesterday.

Extension of Mine Life

This is a very significant point indeed. There is potential to extend the project life by treating ore from inferred inventories from the known resources and from other sources beyond Thackaringa, which represent opportunities for Cobalt Blue that would have significantly positive returns on capital. This potential is also highlighted in the announcement made yesterday.

About Cobalt Blue Holdings Limited:

Cobalt Blue Holdings Ltd. (ASX:COB) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt. This strategic metal is in strong demand for new generation batteries, particularly lithium-ion batteries now widely used in clean energy systems.

COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Ltd. (“BPL”) in which COB seeks to acquire an initial 51% interest in the Thackaringa Cobalt Project. COB will undertake exploration and development programs on the Thackaringa Cobalt Project and, subject to the achievement of milestones, will acquire 100% of the Thackaringa Cobalt Project.



Contact:

Joe Kaderavek Chief Executive Officer
Cobalt Blue Holdings Ltd.
Ph: +61-2-9966-5629
Website: www.cobaltblueholdings.com
Email: info@cobaltblueholdings.com