Historic work at Hylea (which includes the Hylea and Bulbodney intrusive complexes) has included some drilling, but was focused on platinum exploration; drill results from this work have, however, highlighted the potential for high-grade cobalt and scandium mineralisation.
Hylea’s immediate focus will now be on field activities, including drilling, to work towards an initial Mineral Resource Estimate (“MRE”), with positive drilling results and initial resources being a key value driver.
The Company sees significant upside in the pricing of cobalt due to supply pressures attributed to the increasing popularity of lithium-ion batteries in electric vehicles and a range of modern electronic devices (for example, mobile phones, tablets, portable computers, power tools). Presently 94% of the global supply of cobalt is as a by-product of copper and nickel production and therefore its availability is controlled by the vagaries of those markets. The balance of supply is mostly sourced from countries with elevated sovereign risk such as the DRC.
Should mining and refining capacity growth fail to keep pace with demand, Hylea perceives a substantial deficit opening in the market before the end of the decade. Subject to ongoing exploration success, the Project potentially can provide a secure independent source of cobalt and leverage Hylea to future market price sensitivities.