The former chief of graphite behemoth Syrah, Tolga Kumova, has found himself a new way of gaining exposure to the lithium battery revolution, this time in the form of an ASX-listed Slovakian cobalt project. Plus, closer to home, Image Resources is preparing to cash-in on rising mineral sands prices.

Melbourne’s bustling Tolga Kumova made a name for himself by taking Syrah (SYR) from a penny dreadful to the $700m leading graphite stock it is today.

Kumova has since moved on from Syrah but his affinity with the lithium-ion battery revolution has not diminished. It’s just that his focus has moved on to the higher value battery raw material – cobalt.

Cobalt prices have soared to $US58,000 a tonne ($US26.30 a pound) on the realisation that of all of the battery raw materials (it gives batteries their grunt and is found in most lithium ion battery types), it is cobalt which has the most interesting supply-demand dynamics.

About 60 per cent of the world’s supply comes from a part of Africa where you wouldn’t send your kids, let alone have them pressed into working at one of the mines.

It throws up a whole set of ethical supply questions for the consumer electronics companies and a growing band of car makers and power companies. But first they need more supply choice.

Kumova reckons he might have found the answer in Slovakia near the historic mining town of Dobsina.

The renamed European Cobalt (ASX:EUC) – Kumova is the non-executive chairman and a 15 per cent shareholder - recently completed the acquisition of Dobsina, first identified by EUC managing director and 8.5 per cent shareholder, Rob Jewson.

That EUC is now a $45m company (7c a share) reflects the market’s imagination having been captured by Dobsina. And the reason for that is the super high grades encountered there in historic operations.

And when we say historic, we mean historic when it comes to Dobsina – back to the 13^th century for iron ore, the 14^th century for copper and the 17^th-19^th centuries for nickel and cobalt.

Hand sorting of the ore by the oldtimers was the order of the day and it can be assumed that the mineralised “waste” dumps they left behind will be of particular first-up interest to the modern day explorer EUC.

EUC has not said much about the forward program but a presentation lodged yesterday on the ASX did point to the sampling of waste dumps, followed by a mapping and sampling program (there is 40km of historic tunnelling that chased the cobalt/nickel mineralisation) ahead of surface-underground drilling.

The buzz with the dumps sampling, and the later drilling for new ore positions, will be around the grades. Historically at least, grades of up to 8% cobalt and 17% nickel were recorded.

Match cobalt’s high-value to a potentially high-grade resource, be it from dumps material or new ore positions, and things start to get interesting as it won’t take much on the tonnage side of things for some big numbers to fall out.

Image to capture rising mineral sands market

There is a good reason why shares in mineral sands king Iluka (ASX:ILU) have popped 24 per cent higher since mid-March.

It’s because mineral sands prices are finally on the rise after five years of misery for the producers.

That came through loud and clear in late May when Iluka pushed through a 13% increase in its zircon reference price. It is the world’s biggest producer of the stuff, which is used in the production of ceramic tiles (which the Chinese love), refractories and foundry castings and a growing range of speciality metal and chemical applications.

Iluka is also a big producer of titanium dioxide ores (rutile, leucoxene and ilmenite), the main use of which is white pigments in paints, plastic and paper, along with welding rods and growing applications in the manufacturing of titanium metal and powders for the world of 3D printing.

The titanium dioxide market has been more subdued but it is hoped that the 4% price increase that came through in the opening quarter of the year was but the start of further gains. There are no guarantees in all that as higher prices in the past have flushed out stock liquidation by Iluka and the other big players.

And the incumbent producers also have lots of latent capacity which can be dialled up quickly to capture higher prices, just as Iluka has done this week with its announcement that its dormant zircon-rich Jacinth-Ambrosia minerals sands operation in South Australia will be restarted in December.

Still, the restart and the price increases pushed through all go to confirming that happier days have arrived for the mineral sands sector after five years of pain.

Today’s real interest though is in the trickledown effect of all that on the mineral sands explorers/developers.

Image Resources (IMA) is one to benefit. Its shares have outdone Iluka in percentage terms, rising from 4c in March to 10c this week. Aiding the junior’s cause is its status as a near-term developer at its Boonanarring/Atlas mineral sands project, 80km north of Perth.

Apart from a good sized zircon-rich resource, Image has most of the kit and gear it needs to get the project in to production sitting in Adelaide and ready to be trucked across the Nullarbor for reassembly, courtesy of last year’s deal with the Chinese-owned Murray Zircon (MZ).

MZ operated the since closed Mindarie mineral sands project in South Australia and its equipment deal with Image ended up giving it and its parent, Guangdong Orient Zirconic (OZ), 42 per cent of Image, a relationship strengthened in an arrangement for OZ to receive Image’s zircon production from a Chinese processing separation company, Natfort.

It is with Natfort that Image has secured an offtake agreement for 100 per cent of the heavy mineral concentrate (HMC). Importantly it is based on then-current relevant market prices for the full suite of products on a shipment by shipment basis, and without the sort of the minimum specifications that can mess with cash flows early on in new mine developments.

Natfort gets a mark up for its services but Image doesn’t have to fund – or worry about – all the downstream things needed to make a mineral sands business a success.

Image’s recently released bankable feasibility study estimated a low capital cost of $52m (due mainly to the deal on the Mindarie equipment). Net present value, pretty much based on consensus on where mineral sands prices are headed, was put at $135m and capital payback was estimated at 22 months.

Subject to financing, first production could be in April/March next year. By then, a lot of would-be developers will still be scratching around for the all important offtake agreements, let alone ordering up long lead time plant and equipment. Image is already there.