Yes, the charts show ups and downs of 50% or so in 6 to 8 weeks, so many punters are buying and selling this bucking bronco. The EV revolution provides the backdrop. Good luck to all who can trade the cycles (not me - I'm in for the long haul), but sympathies to those who lose their nerve and sell at the wrong time.
Let's be specific. ARL is the only Aussie cobalt company that I know of which has actually released a PFS lately. It shows that a Capex of about $400 million or something like that will be needed. But hey, they're sitting on $100 billion of ore. Yes, a capex of $400 mil for producing the first of its $100,000 mil. The PFS calculates that repayment of Capex is about 5 years and the operation will be producing profits for many decades. And it is still finding more ore in its tenaments and refining its plans. (Add to that ARL's numerous gold and metal tenaments.) Is that a good business proposition? or what?
Don't fall for the line that if its a laterite deposit, then its not as good as a sulfide deposit. Both have their strengths. Generally laterites are consisent, thick deposits which have low levels of unwanted contaminants. But laterites generally rely on high pressure acid leaching (HPAL) to extract the metals. On the other hand, sulfides are ofter richer (ore has a higher % of metal), but made up of a stockwork of veins, so not as large or consistent or as thick as laterites. However, sulfides can be extracted without pressure, so that stage of manufacture is cheaper. Good sulfide deposits are rare though, and they are often deeper than laterites. Perhaps AML is the best of the sulfides, but what would I know? So its a case-by-case assessment for each company's deposits. You do the research.
To put cobalt small caps into perspective, you have to understand that they will be mining as well as producing nickel sulfate and cobalt sulfate in highly purified form - ready for the EV revolution that is underway in Europe, China, Sth Korea and Japan. CLQ has stated that it wants to actualy produce rechargeable battteries! So cobalt mining involves manufacturing at the same site. Its decades since a mining company did that, so it will take most Aussies a while to believe it. I know the government in Canberra and its lobbyists don't have a clue, so don't be put off by the constant negative propaganda. The world is moving at a rapid pace towards EV and leaving the hydrocarbon economies (USA, Middle East and Russia) behind. The EV revolution will cause a major shift in the world's energy supply and, as a result, the world's economies and power base. But once again, don't just accept what I say.
You ask: where will they find the money to fund the Capex? ALS's PFS says it will be a combination of shareholder funds, new investors, loans, etc. No problemo. Some big companies can see the writing on the wall and joint ventures are being quietly discussed. For example, BHP has stated that it is looking at doubling its nickel operations in WA and getting into cobalt. It will be processing semi-processed ore from third parties (i.e the small cap cobalt miners in WA).
