Australian article

FYI, the full article from The Australian today;

Koreans baulk at cobalt deal as prices tumble; Paul Garvey, The Australian 2^nd January 2019

The fate of a crucial agreement between cobalt hopeful Australian Mines and major South Korean chemicals company SK Innovation remains up in the air after a key deadline came and went.
SK had until December 31 to exercise an option that would have given it a 19.9 per cent stake in Australian Mines for just over $80 million.
But the option has been well out of the money in recent months, leading to questions over whether the Korean giant will exercise the option or try to negotiate a new agreement.
The option had a strike price of 12c per share, well above the 3.8c per share at which Australian Mines closed on New Year’s Eve.
The $80m option was part of a crucial offtake agreement signed between the two groups last February.
December 31 also marked the date by which Australian Mines was supposed to have obtained funding for the development and construction of its Sconi cobalt project in Queensland. That deadline was one of three material conditions precedent to the offtake agreement.
The agreement did provide for the financing condition to be extended under mutual agreement between the two companies, although there has been no announcement of any such extension to date.
Australian Mines managing director Benjamin Bell did not return calls yesterday.
The company was among the best-performed companies on the Australian Stock Exchange in 2017 as it capitalised on the growing investor excitement about the potential impact of electric vehicles on cobalt demand.
But the past year has represented a major reality check for the cobalt sector, and shares in Australian Mines have been hammered in recent months amid a broader selldown throughout the cobalt space. The price of cobalt has more than halved since March amid a surplus of cobalt in China, which is the world’s biggest manufacturer of cobalt chemicals and electric vehicle batteries. Both Australian Mines and its bigger Australian rival, the Robert Friedland-backed Clean TeQ Holdings, have also released bankable feasibility studies into their respective projects that underwhelmed the market.
Australian Mines’ study found Sconi would cost $US974 million ($1.38 billion) to build and would generate a post-tax internal rate of return of 15 per cent. However, the study was based around cobalt and nickel prices above current spot prices.
Clean TeQ was hit particularly hard after it found its Sunrise cobalt-nickel project would cost $US1.4bn to build and featured an internal rate of return of 19.1 per cent, although investors questioned the study’s price and taxation assumptions.
The project’s IRR is regarded as a skinny figure for a mine with exposure to two such historically volatile commodities as nickel and cobalt.
Australian Mines shares peaked at 15c in January last year but had fallen to as low as 3c in November.

GLTAH