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26/07/18

17:21

Post #: 34580462
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Originally posted by phuket guy ↑

Some points from the european cobalt traders re their view on cobalt market and CLA in which they own now tens of millions of shares - just sharing an email.

We have not sold any share and are not concerned.

1) Co price

-We knew trade would push Co to 37.

-Now, we review our analysis as follows :

a) it will definitely go lower. Probably bottoming at 34/35. There is however a 20 percent chance it goes below 30.

b) the lower it goes, the higher the chance for a significant rebound is

c) quotation is western driven because only metal. Does not make much sense because metal only account for 1/3 vs salts 2/3, but hopefully that is the way it is.

d) China is the market maker and the market is at least 2 below western ( very complex to compare because duties and mainly vat not fully recoverable ). China seems to stabilize which goes more in the direction of the 34 scenario.

e) EV is great, but actual demand is still small even if it will boom over next 24 months

f) my personal main concern is that everybody swallowed the scale up in Congo ( mainly Katanga which just restarted), but Q1 Congo exports show a 30 percent increase for Co and only 10 percent for Cu. because all the big guys in Congo have Co as a byproduct of Cu, it means artisanal mining boomed which is bad news and not integrated by market.

g) now, as you will read in MB here under, Chinese buy less artisanal because it is (I) only 10 percent Co and generate a lot of pollution for refining and Chinese plants are now under real scrutiny ( even the 2 Umicore plants were shut down because not meeting permit requirements ) (Ii) it is illegal mining and Chinese are more careful because could be banned from exports if discovered.
The lowest price and the fact the smuggler mined the best will also reduce this flow on the production side.
However, artisanal in Congo is the biggest risk for Co prices short term for me.

H) I will call nick French, in the bod of Co 27 and for me the best Co expert early September and we will know more on Co prices for balance of 18

2) Namibia

Very positive to read below that they export Lithium ore at only 2 percent Li to China.
Li is a cheap commodity. It means infrastructure and costs of shipping to China are top.

3) Celsius

- it does not make any sense it collapses because Co goes down because they will not produce an lb before 2 years....

-scoping study will anyway not be based on top of top , but on a cautious price probably starting with a high 2 ( 28/32(?))

- good to read in your previous mail that all is progressing smoothly at the site.

-hopefully, there next release will be in October when Co is stable or up again.

-Very important to understand that if they can confirm another 60Kmt of Co, they can leverage on the fact that with these reserves they are in the top 5 ww and number 2 outside of Congo ( just Sherritt site in Cuba.
Timing of next reserves release is very important and this two facts ( with large untapped potential) will help making Celsius a benchmark .

- I am confident they will find the feeding zone with the EM helicopter study and results will come at a good time late October.

- the fact that they share the study with neighbors is clever. Will help following the DOF of which a small portion is on their land AND if they confirm Co next door could help Celsius to reinforce confidence of investors in their disclosures

Expand

was this an old email PG?
Price has already gone to 31-32 USD/lb??

Asides the 1in5 chance of a dip below 30, very positive insights.

We need them to give the tip to some of their mates and mop up 13-18c range

thanks as always

CLA Price at posting: 13.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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