Cobalt Blue (ASX:COB) grabs 75% of Halls Creek as silver quietly enters the flowsheet

A 870kg sampling program tests whether a single heap leach can carry copper, zinc and now silver too

Cobalt Blue Holdings (ASX:COB) has moved on two fronts at its Halls Creek copper, zinc and silver project in Western Australia. The company has kicked off a targeted metallurgical sampling program and, less noisily, exercised its right to lift its beneficial interest in the project from 51% to 75%. Both matter, but for different reasons.

The metallurgical program is where the fresh commercial thinking sits. Around 870kg of core from the Onedin and Sandiego deposits will be tested to optimise the Stage 1 heap leach, assess whether Onedin and Sandiego can share a single processing route, and, importantly, work out if silver can be pulled out too. The June 2025 Scoping Study only contemplated copper and zinc.

That silver angle is easy to miss and worth pausing on. Halls Creek has meaningful silver credits in the resource, with Onedin’s zinc zone grading 34 g/t and Sandiego’s zinc zone at 35 g/t. If silver drops out of the heap leach at commercial recoveries, the Stage 1 economics tighten materially before a single tonne of ore has moved.

The earn-in move rounds out the update. Cobalt Blue has hit the A$500,000 minimum spend to lock in 51%, and is now committing to A$1.5 million more by June 2028 to reach 75%.

Why a combined Onedin-Sandiego heap leach is the real prize

The June 2025 Scoping Study framed Halls Creek as a staged copper-zinc development. Staged usually means two circuits, two capex bills and two ramp-ups. Testing whether Onedin and Sandiego material can share a single heap leach is a direct attempt to collapse that complexity.

If the metallurgy behaves, the read-through is lower capital intensity, higher utilisation on one facility, and a cleaner story for a regional processing hub that could later take feed from satellite deposits across the wider 250 square kilometre tenement package.

We think this is the workstream investors should track most closely into Q4 2026. The updated Scoping Study is due then, and a combined flowsheet with silver credits would be a materially different document to the one published in June 2025.

Halls Creek is no longer a side project in the COB portfolio

Cobalt Blue’s headline assets remain the Kwinana Cobalt Refinery and the Broken Hill Cobalt Project, both leveraged to the cobalt price recovery from under US$10/lb in 2024 to the mid US$25-28/lb range in early 2026. Halls Creek was the diversification move announced in February 2025, adding non-cobalt exposure via copper, zinc and silver.

The decision to exercise the earn-in to 75% signals management now views Halls Creek as core rather than optional. Scoping Study and PFS costs count toward the A$1.5 million spend hurdle, so the company is effectively earning up while doing the technical work it needed to do anyway.

That is a capital-efficient way to consolidate ownership, and it removes an ambiguity that had sat over the project since the joint venture was signed in February 2025.

What could still go wrong before Q4 2026

Metallurgical testwork can disappoint. Silver recovery through heap leach is not a given, particularly where silver is locked in complex sulphide assemblages, and the June 2025 study left it out for a reason. A poor recovery result would collapse the upside case rather than expand it.

There is also the broader COB context. Broken Hill environmental approvals are still working through the system, and Kwinana continues to consume capital ahead of its 2027 target for cobalt sulphate production. Halls Creek is competing for management attention and cash in a company doing three big things at once.

The skeptical read is that adding silver to the flowsheet is partly a narrative move to keep Halls Creek relevant while the cobalt assets do the heavy lifting. We would want to see the actual recovery numbers before deciding.

The Investors Takeaway for Cobalt Blue Holdings

Halls Creek has gone from a hedge inside the COB portfolio to a project the company is committing real capital and ownership to. The near-term catalyst is clear. Metallurgical results feed the updated Scoping Study in Q4 2026, and that document will tell investors whether silver is a real value driver, whether a combined heap leach is technically viable, and whether the regional processing hub concept has legs.

Readers can find our earlier coverage of Cobalt Blue and the broader ASX cobalt space at stocksdownunder, including how the Legacy Minerals partnership and the Kwinana refinery fit into the picture.

For now, Halls Creek is a call option on metallurgical results between now and year-end. The 75% earn-in decision suggests management thinks the option is worth paying for.