It's been a rough day at the office, but a rational look at the PFS and we can see it's not so bad. The mine is easily the most achievable of the Australian Co mines so far with these numbers, but COB always has the upside of resource upgrade, pure Cobalt appeal and Refining IP patents in it's back pocket.
1. The post-tax IRR jumps to 25% (+ $87 million to NPV) if they use the recovery rates COB achieved in testing (88.5%). It is noted that they are aiming for recovery rates of 90% which would make this even higher.
2. Add another 50% ($257m) to the NPV assuming they achieve a 20 year mine life, which appears very likely.
3. Tailings provisions and power savings - Tailings (the site provision for left-over slurry) is estimated at $4 per tonne. This appears to be a high cost and is likely to be reduced. $38m and another % point to IRR is expected from these.
All together, we are talking of an NPV of $935m and an NPV of 26%.
CATL is building a battery factory that is 140 football fields in size. Cobalt will be absolutely fundamental to EVs for the next 10 years and even the best thrifting scenarios predict that Cobalt outside the DRC will be required to make this work. COB will be built, it all just a matter of how much we all make from it.
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