CLA chart, page-2285

Caveat: The following commentary is just my calculations and ideas from my own reserach- all IMO. to follow it up do your own research -ive been doing A LOT recently..


Apart from the Cobalt price fall and general bad sentiment cycle in Li/Co stocks IMO the main reason for CLA fall and now its SP stabilisation or even turn around is I believe Gheko have stopped selling - till at least after the SS IMO (it could otherwise be construed as potential insider trading) . By then the market will be more active and IMO hopefully new and bigger deeper poecketed buyers coming in etc...Their continual selling last six weeks was like a contagion freaking-out and downpreassuring the market- in a long retracement people who do not understand their investment well -and belive in it -loose their nerve and capitulate. IMO I've made some calls to Nambia and it seems Gheko's immediate cash crunch problem created from one of their other mines is now hopefully being overcome. Also IMO theres a group lined up to take out any paper they may need to sell.

Now the Scaredy cat (or pissed off) sellers from the fall are probably less scared and now holding or at least holding off selling and the buyers and vultures who were waiting for lower lows to fill up probably believe the bottom has been reached and IMO will most likely now have to start to compete to buy thereby hopefully starting to drive SP gradually northwards again towards SS date.

More importantly in the real cobalt market - from my research IMO the boys are back from summer hols and mating season is about to start- as per the several recent Metals Bulletin reports, general stocks of the high and low quality metal and the salts (sulphide heptahydrates) all seem to be lower than at the high prices a few months ago and with the general demand for cobalt relentlessly increasing we should logically (hopefully) see some firmness returning to the cobalt price next few weeks. The sleeping elephant in the room is rousing.

It appears from my research that a credit crunch by Chinese banks lending to battery makers over the summer (IMO Most probably a Chinese govt imposed policy from above intentionally to try to cool off the cobalt rally )- left them with less buying credit power and was one of the main reasons behind the retracement over summer.

IMO China who is leading and wants to keep leading the EV revolution, and control of the strategic new battery market and cobalt supply does not want the price going too high to keep the technology affordable and keep the EV revolution on track.

It seems the Chinese govt and CLA shareholders interests may actiually be perfectly aligned in this respect. Keep the price just below the point that people really start throw money and time and expertise to substitute Co levels in the Batteries for other technologies. It seemes to have worked with Panasonic and SK (I believe) etc formally announcing that they will lay off advancing their NCA and 811 battery research and mass prodcution in the meantime. (it would therfore logically seem to me that a cobalt price below USD 80,000 a ton probably makes it not worth the effort and cost of investing in the new techs- remeber they are also expensive and need other metals which will rise in price accordingly too!)

so IMO it seems USD 70-80,000 a ton may be the new equilibrium price for now.

If CLA can produce for IMO (only my own calculations) around USD 45,000 a ton thats a sweet profit per ton left over +with the copper and Zinc credits. IMO It could repay the required capex at OPuwo in 2 years IMO.- and puts us on a potential forward PE of way less than 1.

But looking forwards as each million new EV cars selling quicker and quicker -and EV cars making up a large percentage of the growth in car sales in many markets (thats the cutting edge) the CO demand should continue to grow - can DRC continue to keep increasing production of Co at these prices?? - Especially with the new 10% tax probably coming- that alone should for example makesthe price of 75,000 a ton today increase to over 80,000 a ton in time as the tax gets passed forward to consumers.

Then to coax additional production from new countries entering the game such as Canada and Aus -(either arsenic rich or latterite based) it will will require big capex and higher OPEX costs -which LT should support or increase the price.

BB's masterstroke find in Nambia is looking better and better value if you simply do your reserach and look ahead intelligently and logically. CLA just needs to get out and market themselves more to the world now and -hopefully that will start more forcefully after the SS and (IMO expected comming resource upgrade) will better define the scope of the deal.

all good stuff.

as I say IMO with an LT view this last retracement in SP (while it sucked) is/was just a storm in a teacup in the greater scheme of things. ....again Ifyoure and EV bull repeat dont underestimate how high this could go!