- AUZ – 12 Feb 2018
The fun has just started – hang on tight – there is a lot of more news coming probably thick and fast over the next 1month and the next 1-6 months.
I am expecting if not tomorrow then shortly afterwards BMW to be one of the off take partners, BMW said they were ready to announce a long term contract in Dec last year and then did not – this seemed to co-inside with the AUZ delay in the set up and commissioning of there scalable demonstration plant.
Remember BMW have stated they want “ethical cobalt” non DRC Cobalt there are only 2 or possible 3 (I know of only AUZ and possibly CLQ) that can meet non DRC cobalt sulfate by end 2019 when the new EV car production lines really start ramping up production.
- Note my previous post. At the same time, few greenfield projects are likely to make it to production in the foreseeable 4-5 years future. “We’ve got a database tracking about 400 potential cobalt projects, but at this stage there are only about three that we’re taking seriously,” said. George Heppel, a consultant at CRU Group, said by phone from London. (Note:- I expect AUZ is one of those three.)
I expect this will be only the first of 3 or 4 off take agreements that will be signed by AUZ over the next 2 months and each of these will include an off take and finance package from the potential finance partners. See the finfeed article below (finance package will be included by potential partners in their off take discussion)
We know from what Ben Bell has previously said that they are talking to 9 potential off take partners. We know from the Medea announcement that they will be evaluating and assisting signing of multiple off take agreements over the next few months. So after this off take who ever it may be with expect more
We also know from what Ben Bell has said that
- There will be minimal dilution to existing shareholders – so I do not expect a JV either for Sconi or AUZ and I also expect that the proposal tomorrow will include either directly or indirectly via a bank a finance element.
Note:- Typically Chinese partners want to take a JV or equity stake while western entities are fine with long term contracts. I suspect that they are signing this off take contract first – as they want to show this as a “model” to the other potential off take partners.
- A modular development of Sconi – see my earlier post of BB e mail reply to Teddy
From Teddy afro post
Question: And how do you scale to 12kt?
Reply from Ben: The PAL + SX are modular.
Answer We propose to build them as a series of 750,000 tonne per annum throughputs.
Therefore, but building additional “lines” (as they are called) we can scale up from 3,000 tonnes of cobalt sulphate per year to 12,000 tonnes of cobalt sulphate per year
Flippa many thanks all you great comments you are obviously very knowledge, can I ask what you think the reason/ benefits for the modular design are.
Is it
- 1) An off-take finance matter i.e a new model that each off take partner will own a specific module or specific modules .
- 2) Simply being able to scale up time wise i.e first module to produce 3,000 tonnes of Cobalt Sulfate may be ready from end 2019 – and others being added after that to get to current projection of 12,000 tonnes
- 3) Is it quicker or cheaper to buy and build plant or run if AUZ have many smaller modules than say 1 or 2 like it appears that CLQ who have purchased the big second hand autoclaves seem to be doing (I know the CLQ process is unique and a little different)
e are 4 modular units capable of 3000 tonnes pa of Cobalt Sulfate cheaper and quicker to supply and build that 1 or2 larger modules.
I think given the delay in commissioning and no ASX announcement that commissioning and or off take samples shipped many “traders” may have been caught out of AUZ at the timing of this – possibly why we are getting a few more down ramps ahead of the re-open Wednesday morning
With more off takes and the Sconi PFS coming but without being able to know exactly when specifically they may be announced – this is not a stock to trade or be out of.
IMHO hold on tight to your shares and enjoy the ride – the announcement tomorrow and other off take announcements over the next 2-3 months will put us on the global investing map as the most advanced non DRC cobalt producer. Plus of course Ben Bell will be able to have significantly more street cred – when he does his monthly investment road shows with one or more major company long term off take partners signed.
Tony I agree if all goes according to plan I can see A$0.40 by July/August i.e announcement of start of Sconi mine and production facility development. Add into that good drilling result from Flemington and a PFS fro Flemington and good Thackaringa drill results and Plus Sconi build progress and I can also see A$1 per share end or year 2018 to mid next year
We are finally on the move again - Keep the faith - All the best & GLTA –
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