COB chart, page-168

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philh9

11,765 Posts.

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19/09/18

16:07

Post #: 35703257
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Originally posted by Skattie11 ↑

The discussion with BPL should have happened before the PFS was released. A lot of the pain we have suffered could have been avoided. COB rushed the PFS before securing sufficient LOM & refining the opex costs. The negative impact of that rushed process was a huge correction in the share price, well beyond the sector average.

Now we come to an impasse re the BFS. Kudos to COB management for flagging this immediately after the Wood gap analysis. BPL must now decide if they want to repeat the PFS fiasco by rushing COB to produce a BFS by the agreed June 2019 deadline. If they choose to then COB is only able to deliver a "concentrate only" alternative - meaning lower capex but also a much lower effective cobalt price and lower NSR for BPL. The sulphate BFS is going to take longer - perhaps until June 2020. This isn't what we as shareholders want to hear but at 30c the market has priced in the delay and then some. If COB can secure additional cobalt pyrite ore from nearby deposits then a lower cost concentrate product to start producing it isn't the end of the world. What I am saying however, is that I wouldn't want to be painted into a corner where that's the only alternative we have. BPL now need to come to the party.

COB was always targeting June 2020 as the final investment decision date - giving itself a window to finalize funding etc. If the Wood process is thorough that window length could be narrowed as offtake / LG Chem partners would have more comfort in the robustness of the BFS. A delay in the BFS doesn't have to mean an equal delay in the final investment decision.

As a final comment - in order for COB's price to recover and the project to go ahead BPL need to make a supportive and public concession on the BFS & LG Chem need to take an additional equity placement, at a premium to spot. The market needs to see this. The cobalt price appears to have bottomed according to Roskill - meaning that headwind should be avoided.

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Good post @Skattle

The TJV have some substantial incentive to get their sheet together, rightly or wrongly I have sensed friction. Now I am keen to see what the outcome now with extra motivation is at the meeting with BPL, I would not be surprised to see a positive announcement following this meeting. Having plumped on this being near to my .28 low, I hope so.

Cheers
Phil.

COB Price at posting: 28.5¢ Sentiment: Buy Disclosure: Held
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