Broken Hill wants to mend fences with Cobalt Blue to get Thackaringa project ‘back on track’
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Explorer Broken Hill Prospecting is extending an olive branch to spin-out company and JV partner Cobalt Blue to end a dispute over custody of the Thackaringa cobalt project.
The relationship soured in October, when Cobalt Blue (ASX:COB) refused to rush final feasibility studies on its Thackaringa cobalt project in NSW to meet a mid-2019 deadline — forfeiting the chance to grab full ownership of the project from its JV partner Broken Hill (ASX:BPL).
Instead, COB will remain 70 per cent owner of Thackaringa, with BPL owning the other 30 per cent.
The agreement mandates that the company holding the largest JV interest — which is Cobalt Blue — must act as interim manager until a new project manager is appointed, COB told investors.
But BPL says COB’s position as manager of the project under the JV has now ceased — and any project work done without its approval “remain at the sole risk and cost of Cobalt Blue”.
“All attempts by BPL to arrange a meeting between joint venturers to discuss the appointment of an independent professional manager of the Thackaringa project have been ignored,” it said.
According to COB, a Thackaringa Joint Venture (TJV) management committee meeting on Friday last week discussed — but did not propose — any resolution to appoint a new JV manager.
Broken Hill is also disputing that the TJV “discussed and approved” work programs at the meeting, including a drilling campaign currently being conducted on site.
Cobalt Blue wanted approvals for Thackaringa feasibility study work programs and budgets totalling $28.6m out to June 2020.
Now, BPL has indicated that it wants to get Thackaringa “back on track”, BPL chairman Trangie Johnson said.
In a letter to shareholders today, Mr Johnson proposed a four step plan, including:
“COB’s PFS, despite its apparent deficiencies, confirmed our belief that the Thackaringa cobalt project has the potential to become a world-class cobalt producer,” Mr Johnson said.
“By adopting our plan, we can overcome recent disagreements and place the project firmly back on the path to development.”