Conico Eyes Standalone Future for Mount Thirsty Project

• Conico Ltd is spinning out its 50% interest in the Mount Thirsty nickel-cobalt project in WA into a standalone entity.
• A scoping study is underway examining the potential to apply HPAL technology, which could significantly improve recoveries.
• The scoping study will determine economics and parameters for a potential HPAL development at Mount Thirsty.
• Conico plans to raise A$5-15M in late 2023 to fund the spinout and scoping study.
• The company sees potential to attract investment given the large scale and battery metals focus of the project.

About Conico

Conico Ltd (ASX:CNJ) is a mineral exploration company focused on discovering world-class mineral deposits. The company has projects in Greenland and Western Australia. Conico's flagship project is the Mount Thirsty Cobalt-Nickel project, located 16km northwest of Norseman, WA. The project is a 50/50 joint venture with Greenstone Resources.

Interview with Executive Director Guy Le Page

Interview with Executive Director Outlines Path Forward

Guy Le Page, Executive Director of Conico Ltd, recently spoke about the company's plans to spin out the Mount Thirsty project into a standalone entity and complete a scoping study by late 2023.

Le Page has over 25 years of experience in mineral exploration, mining analysis, and corporate finance. He joined Conico 15 years ago and has played an active role in refocusing the company from Greenland to the Mount Thirsty project in the last 12 months.

Project Overview

The Mount Thirsty project contains a JORC compliant resource of 16.7Mt at 0.14% Co, 0.60% Ni, and 0.98% Mn. The 50/50 JV partners are looking to spin out this asset into a standalone company and complete a scoping study by Q4 2023.

The project was previously tested using atmospheric leaching, which achieved nickel recoveries of around 20% and cobalt recoveries of around 80%. However, Le Page believes there is potential to significantly improve recoveries using high pressure acid leach (HPAL) technology.

Pursuing HPAL Potential

Le Page explained that HPAL technology has advanced significantly thanks to new projects in Indonesia. The ramp up time for these next generation plants is much faster, reportedly 3-5 months versus 1-2 years previously.

Consultants involved with the scoping study are more optimistic about applying HPAL to Mount Thirsty given these technological improvements. The process operates at higher temperatures (up to 800C) which could substantially increase nickel recoveries from the laterite ores.

Scoping Study Details

The upcoming scoping study will examine project parameters and economics using this HPAL flowsheet. There is potential to optimize and high grade the first 5-7 years of production. The study will determine the path forward for a potential standalone Mount Thirsty company.

Capital Raising Plans

Conico is aiming to raise A$5-15 million to fund the spin out and scoping study. The company is targeting completion of the capital raising and listing of the new entity by Q4 2023. Conico hopes to secure a cornerstone investor or underwriter to support the capital raising.

Le Page said the junior resources sector is still attracting interest from investors despite recent market volatility. He believes the Mount Thirsty project can attract funding based on its large scale potential.

Market Outlook

In terms of nickel market conditions, Le Page noted forecasts are pointing to a surplus in 2023-2024 mostly from Indonesian HPAL projects. This could put more downward pressure on nickel prices in the near term. However, longer term demand still looks positive, especially with the shift towards electric vehicles.

Le Page said the Mount Thirsty scoping study, due in 6-8 weeks, will be a major catalyst for Conico. He believes the company's share price is currently bottoming out after pressure from market conditions and drilling results in Greenland.

Conclusion

Conico Ltd is positioning the Mount Thirsty project to be spun out into a standalone HPAL nickel-cobalt company. The scoping study due in late 2023 will outline the parameters and economics for a potential development.

Conico's large scale nickel-cobalt project has appeal given the metal's crucial role in batteries for electric vehicles. Investors looking for leverage to the battery metals boom should keep an eye on Conico as the spin out transaction progresses. The capital raising planned for 2023 provides an opportunity to get in at the ground floor of this promising battery metals project.