During this weekend, I have done a easy survey on twitter about people's thinking about cobalt in 2022, below is the survey result, 74.1% people hold the opinion that cobalt will be hot in 2022 and my thinking is also same, cobalt sentiment is becoming very bullish now, in this thread, lets just look at CLA's cobalt;
- CLA have the best batch of cobalt material types for batteries in the world, from soft linnaeite sulphide, which is easier to crush and separate, low in arsenic and other harmful materials. Cobalt from laterite ore (usually accompanied by nickel) is very difficult to pulverize and process (most Australian listed companies are cobalt mines of this type.)
- CLA has largest cobalt JORC resource among all the cobalt players at ASX;
- CLA has a very good cobalt grade, 0.12% on average - (anything below 0.08% is hardly economical imo). So far, no large mine outside of DRC has a better grade than CLA.
- Namibia has a very good legal environment, one of the best mining environments in the world, safe, easy to mine, good infrastructure, and lower mining costs than Australia, Canada, especially DRC,
- Good port and processing facilities near the Walvis Bay industrial Port Zone - where CLA can either sell the ore concentrate directly or process it further into cobalt sulphide and Copper metal sheets for added more value;
- DRC has very good cobalt mine, but the supply is very unreliable, unstable, poor infrastructure, corruption, child labor, hand-grabbing, so people try to find other large high-grade non-DRC mines, CLA's large cobalt JORC is a very good target for sure.
- Cobalt is a companion of copper and nickel, usually in a ratio of 10 to 1. However, the resource of CLA is 4 to 1, therefore, CLA is one of the largest and most valuable cobalt-based copper associated minerals in the world..
- CLA's current JORC resource is only based on its 15km DOF strike, they have 100km DOF strike, so it still have huge potential to increase their current JORC resource, or CLA can opt to sell some of their DOF strike?
- The cobalt project is low in deleterious elements like As and Cd
- CLA cobalt is present as linnaeite ( Co sulphide), it is generally significantly lower capex and opex
- It is easy for mining, Namibia is political stable, perfect infrastructure, 800 kilometers away from the capital by road, close to the port, with electricity and water
- Mining costs are relatively low in Namibia (cheaper than Australia, much cheaper than DRC)
From previous research on CLA, here are some key points
- Use open pit mining which is most effective for DOF, then go deeper with UG method. The key is to determine the critical depth and find the most economical critical depth to change from open-pit to underground mining. The cost of open-pit mining is low.
- It was previously estimated that the cost of open-pit mining was $1.5 to $2.5 per ton. As the stripping depth of open-pit mining becomes deeper, the cost will reach about 8 to 9 times and the total cost of mining should be less than $20. The separated concentrate ore is likely to be sent to Walvis Bay port, and the overall cost per ton is less than $50;
- According to the rate of return of the concentrate, in order to maximize the profit, it is necessary to consider whether to just sell the concentrate or further process it into copper cathode metal and cobalt sulfate powder
- The Capex of open-pit mining is about 100-160 mill AUD. The underground method is about 300 mil Capex. It is better to use open-pit mining first to generate cash flow. Both open-pit and underground mining are economically feasible.
- Compared to industry valuations: ASX has many cobalt-related exploration companies - we can compare those players who has completion of Jorc and currently relatively large and high-grade ore - they are:
SRL, it has 101 Mt Jorc grade 0.13% Co (but belongs to laterite nickel ore) , with a market value of 185 million AUD; ( market cap / kt co = 1.39)
AUZ , it has 89 Mt grade 0.06% -(nickel laterite) market cap 90 mil ( market cap / kt co = 1.67)
COB (sulphide), 118Mt at 0.086%Co, market value 155mil ( market cap / kt co = 1.54)
For CLA, the market cap /kt co = 0.116 which is too much low compared to all other players and it has very huge space to increase obviously.If we use above average value, CLA market cap should be 30* (1.54+1.67+1.39)/3 / 0.116 = 396mil AUD
(20min delay)
