Ann: Quarterly Activities Report, page-7

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Jukebox45

1,806 Posts.

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11/10/19

08:45

Post #: 40827866
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Originally posted by Jskl76 ↑

I personally think that investing in cobalt, especially the juniors, requires foresight. You can't just switch focus back to Cobalt when the price is hot. Look at the two previous peaks in the price. True, the price did stay at elevated levels for reasonably long periods of time (about a year each peak), but not long enough to be the catalyst for sustained investment and development "if you started near the peak".
Timing, and the ability to spot the factors that will cause the price of Cobalt to peak again, are necessary to be successful in this market. Now, let's put aside Opuwo for the time being and only consider the Cobalt market. I think the important factors are:
- on the supply side, the low price has caused the duopoly (Chinese companies & Glencore) to scale down their production.
- on the demand side, EVs are now even closer to mass production than ever before
- a side effect of the above, that can be our "canary in the coal mine", is GEM Co signing a 5 year Cobalt supply deal with Glencore. The last time this deal was on the table, Cobalt was halfway down from its last peak.
- The GEM deal also takes out 1/3 of Glencore's total Cobalt output. With Mutanda to be mothballed for 2 years starting 2020, how much Cobalt do you think Glencore can supply to the rest of the market after accounting for this deal?
- another interesting point is that GEM Co's primary business is actually battery materials recycling. Why would they need a Cobalt supply contract? Does that mean that recovering Cobalt by recycling batteries is not viable? Food for thought.

The above factors all point to a much higher Cobalt price. That means the time to get in position for maximum profit in this market is now.... Or soon, at least.

Now let's consider Opuwo and all the unanswered questions about it. I'll make this short. The (share) market has already passed judgement on it and declared it a dud. This is reflected completely on the company's SP. Yet the company still wants to develop it, even when there is cash in the bank. This is not normal behaviour for a dud project. I think there is still value in Opuwo, my 2c.

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Yet the company still wants to develop it, even when there is cash in the bank.

Do they?

Or are they happy to suck on the shareholder's teat, spending the cash we have to pay salaries and contracts to mates?

Until we get transparency in the met results, and an actual plan which includes a cobalt price at which we can expect this project to be viable and restart work in full, then all I feel is my pocket... being filled with urine.

CLA Price at posting: 1.6¢ Sentiment: None Disclosure: Held
22 Upvote

8 Great analysis

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