It is really quite simple. Cobalt prices drive the value of this company. If we go back to 2021 company presentations, they were saying that with a cobalt price of $US30/lb the COB NPV was around $700m. For a company at this stage of development their value could be say 20-30% of the NPV although some would argue higher and others lower. The same slides showed that the NPV dives to just $100m when cobalt prices drop to $20/lb.
Today, cobalt price is at $15/lb! At those levels COB isn’t worth anywhere near the $100m MC it currently sits at. With the decarbonisation drive worldwide, everyone thinks it won’t stay at $15 but will it rise to 20 or 30 or even higher is the gamble. All the cobalt stocks are down at the moment; the real question is which will survive to see the upturn? Has COB got far enough through the development phase to secure its future and realise the benefits of a potential upsurge in cobalt demand in the coming years?
Imo I think it is overpriced at the moment for a sub $20/lb cobalt price, but can’t help think that we will see prices jump in 2024 towards the $30 mark again. If it drops to 20c I will be in topping up as I can’t see it staying down here for too long.
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