Mt Thirsty Cobalt Nickel Oxide Project

Conico Ltd through its wholly owned subsidiary Meteore Metals Pty Limited owns 50% of the Mt Thirsty Cobalt-Nickel Oxide Project in joint venture with Barra Resources Limited. Mt Thirsty is situated approximately 20km north west of Norseman in Western Australia, close to main road, rail and pipeline infrastructure. Mt Thirsty has the potential to emerge as a significant cobalt producer and become a major supplier of cobalt to the burgeoning battery supply chain. =

Future demand for cobalt looks encouraging as the world becomes more dependent on rechargeable power sources. Innovations with portable electronics and electric vehicle design are adding to this surging demand. However, the battery industry is also competing with demand for cobalt from producers of superalloys, aircraft turbines and chemical industries.

Cobalt demand is likely to escalate exponentially with projected battery production, however supply is uncertain due to over 60% of global supply coming from the politically unstable African countries such the Democratic Republic of Congo, Central African Republic and Zambia.

With potential supply constraints and surging demand, many commentators see pricing pressure as a likely eventuality.

Mt Thirsty Cobalt-Nickel Oxide Resources

The current JORC 2012 Mineral Resources* for the Mt Thirsty project are tabulated below:
DepositMineral ResourceDry Tonnes (Mdt)Co (%)Ni (%)
Mt Thirsty MainIndicated22.60.1160.53
Mt Thirsty NorthInferred1.50.0920.55
TotalInd. & Inf.26.60.1130.52
*Refer to Conico ASX announcements of 4 March and 12 April 2019 for full details.

Mt Thirsty Main Deposit

The Mt Thirsty main deposit is developed over Archaean ultramafic rocks and extends over a length of 1.8 kilometres and a width of up to 850 metres within the joint venturers tenement. Based on this Mineral Resource there is potential for a significant mine life.

The Mt Thirsty main deposit differs from typical nickel laterite occurrences in that it contains relatively high cobalt values. The orebody is relatively flat lying with an average thickness of 12m and an average depth below surface to the top of the orebody of 14m. Based on the current Mineral Resources there is potential for a long open pit mine life.,br>
The particular mineralogy of the deposit, which is a product of a unique weathering history, allows for rapid leach recoveries (approx. 95% Co and 80% Ni), at moderate temperatures and normal atmospheric pressure utilising acidic reagents. Compared to some other oxide deposits processing is simpler as no expensive and potentially troublesome autoclaves are required.

There is potential to extend the mine life at Mt Thirsty through the inclusion of additional tonnages from other prospects in the region. The joint venture discovered the small Mt Thirsty North cobalt-nickel deposit, 3km to the north of the Mt Thirsty main deposit in 2017.

Scoping and Pre-Feasibility Studies

A Scoping Study was completed in September 2017 with robust financial results (refer Conico ASX Announcement 5 October 2017). A Pre-Feasibility Study (PFS) planned to test additional flowsheet options with the potential to significantly increase metal recovery and further improve the project economics is in progress.

Metallurgical Testwork and Flowsheets

A base line flowsheet was originally developed for Mt Thirsty ore using sulphuric acid leaching. A relatively high cost, high recovery processing plant designed on this flowsheet would produce a mixed sulphide precipitate (MSP) containing cobalt and nickel and a separate manganese carbonate product.

In 2017 further metallurgical test work on a bulk sample from the Mt Thirsty oxide deposit was completed as part of the Scoping Study with some promising results. Test work confirmed that approx. 73% of the cobalt and 21.5% of the nickel should be able to be extracted in 4 to 5 hours from Mt Thirsty oxide ores using low temperature (40oC) agitated leaching in closed tanks with very low acid (SO2) consumption and low iron release. The low acid consumptions achieved of 25 to 50kg/tonne of ore compare with previous high nickel recovery test work undertaken by the joint venture partners requiring 450-500 kg per tonne.

Recent leach optimisation testwork as part of the Mt Thirsty PFS has further enhanced cobalt and nickel extractions. Cobalt leach extractions have been significantly improved to 85% (typical) and as high as 88% and nickel leach extractions improved to 32% (typical) and as high as 37%. The extractions were achieved using modest quantities of SO2 for leaching without requiring the addition of supplemental acid.

The latest metallurgical testwork results represent a major breakthrough for the Mt Thirsty project as acid consumption is a major operating cost item. The recent test work has provided much encouragement, in particular a significant reduction in both operating and capital costs compared to previous studies. Cost benefits of the new processes should potentially far outweigh the lower nickel recoveries achieved.

 To view the Mt Thirsty Project Location Plan CLICK HERE

 To view the Mt Thirsty Deposit Schematic Cross Sections CLICK HERE

Nickel Sulphide Potential

In addition to the cobalt-nickel oxide deposits, the Project also hosts nickel sulphide mineralisation.

A very thick sequence of originally olivine-rich, cumulate - textured ultramafic rocks has been intersected in holes drilled at Mt Thirsty. These rocks contain variable amounts of disseminated, vein and stringer-style sulphide mineralisation. The primary exploration target at Mt Thirsty is nickel sulphides associated with basal lava channel embayments located on ultramafic-basalt (footwall) contacts similar to those in the Kambalda region. A possible basal embayment type structure has been identified within the project area and is currently being evaluated.

May 2010 RC hole MTRC015 intersected a thick zone of nickel sulphides assaying 3.4% nickel over 6m from a down hole depth of 201 metres, adjacent to the footwall ultramafic contact within an interpreted lava channel embayment, 400m west of the oxide deposit within E63/373 (refer Project Location Plan above). Follow up RC drilling yielded further nickel intersections of 2m at 5.9% Ni, 2m at 3.5% Ni and 1m at 4.0% Ni in holes MTRC020, 22 & 030 (refer Longitudinal Section below). A deeper diamond hole to test the down plunge extension of the nickel sulphide mineralisation intersected a thick pegmatite intrusion from 276m to the bottom of the hole. This pegmatite is interpreted as being relatively flat lying suggesting that a significant down plunge portion of any nickel sulphide mineralisation would have been stoped out by the pegmatite intrusion over a vertical thickness in excess of 220m from ~200m below surface.

There is a further 4km of mostly untested footwall contact in E63/1267, a Mt Thirsty Joint Venture tenement 2km to the north of E63/373 (refer TMI Airborne Magnetic Image below showing footwall contact). Considering that nickel sulphides have been discovered in the vicinity of this contact in E63/373 the continuation of this contact into E63/1267 is a priority target for nickel sulphides at shallow depth. A moving loop EM survey has been completed over this area and a number of conductors were identified which warrant drill testing (refer ASX Announcement, 11 November 2013: "Mt Thirsty EM Survey Results" available to view via the Announcements page of this website).