CDU have indicated that they intend to produce a pyrite-cobalt concentrates (~1% cobalt and 50% sulphur). So the question is, not whether the cobalt can be recovered to a concentrate (which it can), rather what is the cobalt NSR (net smelter return)?
* Current LME cobalt price is US$28,250/tonne * For nickel concentrates, the payable cobalt is usually round 30-35% (so assume same payable) * Sulphur prices are privately negotiated, and dependent on location, but is appears that the FOB Vancouver price is ~ US$150/t * Sulphur payables, would be at a guess very low, perhaps 25%?
* A 1% Co concentrate contains US$282.50/tonne of cobalt * Assuming a 35% payable, the cobalt NSR is US$98.90/t * A 50% S concentrate contains US75/tonne of sulphur * Assuming a 25% payable, the sulphur NSR is US$18.75/t
We also have to deduct transport costs/loading costs/insurance etc, so if we assume, transport costs to Townsville of A$50/t (as per CDU), then add another A$25/t (storage, loading, port fees, handling) ~ A$75/t
It starts to become apparent that the cobalt/pyrite concentrate is marginal at best, so I wouldn't be placing much value on the concentrate
CDU Price at posting:
$2.28 Sentiment: ST Buy Disclosure: Held
