Cobalt Blue Exploration Targets Expand at AuKing Mining Ltd Project

Halls Creek Project Review Targets Major Uplift: Cobalt Blue Unveils Significant Growth Potential

Cobalt Blue Holdings Limited (ASX: COB) has revealed substantial upside opportunities at its Halls Creek Project following an engineering review and historical data assessment, positioning the company for enhanced project economics and resource growth.

Engineering Advances Target Major Margin Expansion

Cobalt Blue exploration targets significant margin improvements through multiple value engineering opportunities that could boost the already robust economics outlined in the June 2025 Scoping Study for the Halls Creek Project. These initiatives aim to increase revenue streams, enhance operational efficiencies, and extend the project's mine life.

The company's review has identified three key opportunities for margin enhancement:

• Silver recovery at Onedin presents a substantial opportunity to boost Stage 1 margins, with the production target containing 3.6 million ounces of silver at an average grade of 37 g/t (1.2 oz/t). With silver trading at approximately A$58/oz, potential recovery could deliver significant additional revenue against the current Stage 1 processing cost of A$52.12/t.

• Cobalt inclusion at Sandiego could provide valuable by-product credits for Stage 2, with high-grade results confirming deposit quality. High-grade intersections including 8m at 2.0% Cu, 4.2% Zn and 0.28% Co. This aligns strategically with COB's proposed Kwinana Cobalt Refinery, adding a future-facing revenue stream.

• A centralized processing hub is under evaluation to integrate satellite deposits into the development plan, aiming to extend life-of-mine, increase throughput, and lower unit capital intensity.

"The upside opportunities presented in this release offer immense value-add to the core project outlined in the recent Scoping Study. COB has the right team to unlock silver and cobalt credits, potentially driving major uplifts in cashflow and return on installed plant," commented Dr. Andrew Tong, CEO of Cobalt Blue.

Sandiego North Emerges as High-Impact Discovery Target

Beyond engineering optimizations, Cobalt Blue exploration targets include several high-potential areas, with Sandiego North emerging as high-impact copper exploration target.

Sandiego North is defined by a 700-meter copper-in-soil anomaly with multiple samples exceeding 200 ppm Cu. Significantly, water bore drill hole ASWB01, located 700 meters north of the current Sandiego resource boundary, intersected 5m at 1.37% Cu from 50m and 2m at 1.71% Cu from 85m, confirming substantial copper mineralization.

Deep drilling at Sandiego shows mineralization trending toward Sandiego North, with high-grade results including:

• 12m at 1.3% Cu from 121m (SRC065)
• 11m at 2.5% Cu from 53m (SRC20)
• 13.1m at 2.5% Cu from 455m (ASRD005)

These results confirm the continuity of high-grade copper mineralization and highlight the significant untested potential of the Sandiego North corridor.

Building a Robust Project Pipeline

While advancing near-term opportunities at Sandiego North, Cobalt Blue is systematically building a broader pipeline of exploration targets across the Halls Creek tenement package. This approach involves:

1. Analyzing regional geophysical data to identify magnetic anomalies similar to those associated with the Sandiego and Onedin deposits
2. Evaluating surface mapping of gossans and geochemical anomalies
3. Reviewing historical drilling data to assess the extent and effectiveness of past exploration

This regional targeting work is designed to systematically refine and prioritize targets for follow-up exploration, supporting the company's strategy to position Halls Creek as a long-life, multi-deposit copper-zinc operation.

Understanding Volcanic-Hosted Massive Sulfide Deposits

The Halls Creek Project hosts volcanic-hosted massive sulfide (VHMS) deposits within the Paleoproterozoic Halls Creek Orogen. These deposits form when metal-rich fluids circulate through volcanic rocks and precipitate minerals on or below the seafloor.

At Onedin, copper shows strong enrichment in the weathered zones with minerals like malachite, chrysocolla, and native copper visible in the oxidized material. The primary mineralization is mainly hosted in carbonate-rich rocks. Zinc sulfide (sphalerite) is the dominant metal-bearing mineral, with copper-rich zones mostly limited to oxidized material and certain altered rock types.

At Sandiego, the primary sulfide mineralization forms a massive, wedge-shaped lens approximately 200m long and up to 75m thick. The deposit contains spatially distinct copper and zinc zones:

• Zinc-rich zones contain predominantly sphalerite with other sulfide minerals
• Copper-rich zones feature chalcopyrite and other copper minerals, often associated with fault zones

This mineral distribution pattern is typical of VHMS deposits worldwide and provides important guidance for exploration targeting.

Investment Thesis: A Diversified Growth Story

Cobalt Blue exploration targets a two-pronged strategy for sustainable growth:

1. Near-term production: The Halls Creek Project offers strong economics with Stage 1 and Stage 2 C1 cash costs of US$1.33/lb and US$1.11/lb of copper respectively (net of zinc credits), measured against a long-term copper price assumption of US$4.55/lb.

2. Strategic diversification: Beyond copper and zinc production, the company is building mid-stream processing capabilities including the Kwinana Cobalt Refinery and Broken Hill Technology Centre, aligning with cobalt blue strategic alignment critical minerals.

Why Investors Should Take Notice

Cobalt Blue represents a compelling investment opportunity with multiple value drivers:

• Margin enhancement potential through silver and cobalt recovery could significantly boost project economics
• Resource growth upside at Sandiego North and other regional targets
• Strategic alignment with critical minerals policy, positioning the company in high-demand battery metals markets
• Multi-stage development approach allowing for near-term cash flow while building toward larger-scale operations

With drilling confirming high-grade mineralization at Sandiego North and engineering reviews targeting substantial margin improvements, Cobalt Blue is methodically building value across multiple fronts while maintaining a disciplined approach to project development.

The company's strategic focus on both copper-zinc production and battery metals positions it well in a market increasingly focused on critical minerals for the energy transition. Furthermore, recent gallium discovery in Western Yilgarn critical minerals developments and Inca Minerals gold discovery at Hurricane project show the broader exploration potential in Australia. As Cobalt Blue exploration targets both near-term production and long-term growth, investors have multiple potential catalysts to monitor in the coming quarters.

Want to Catch the Next Major ASX Mining Discovery?

Discovery Alert's proprietary Discovery IQ model identifies significant mineral discoveries the moment they're announced on the ASX, turning complex data into actionable investment insights. Explore historic discoveries and their substantial returns at the Discovery Alert discoveries page and position yourself ahead of the market.