I agree with Skatie post: good summary with what is coming up in the next 12 months.
-But first it is regrettable that the PFS was released at 10 am and not in the evening to enable everyone to analyze the results. We saw a lot of small holders selling when the SP opened lower. In the end only 5+% of holders sold their shares.
-For those who did their homework we knew that the figures would be conservative as this is a trademark of the mgmt. For instance I had written that the LOM of 20 y would only be in the DFS.
-Two things not mentioned but which bolsters COB's unique position:
a)On July 2nd The LME ( London Metal Exchange) announced that all companies getting at least 25% of their Cobalt from small scale mines in DRC will need to undergo a professional audit from Jan next year: if they fail they won't be able to sell their Cobalt on the LME...
2) On July 2nd again Glencore received subpoena from US DOJ over alleged money laundering in deals in Nigeria and DRC : its share plunged. That came shortly after the DRcongo govt confirmed a new tax code with 50% tax on super profits + increased royalty to 5 or even 10% on Cobalt. Also to fend off a court case in DRC the Glencore's subsidiary in DRC announced a capital raise of US$ 5.6Billion, imagine the dilution.
Overall a lot of customers prefer to source Cobalt from non DRC suppliers but right now the choice is very limited. COB will help solve their problem.
-I do not want to repeat what others have said on the PFS but i am confident in the minimum LOM of 20Y , lower Opex and Capex by DFS. COB mgmt knows what needs to be done. To be convinced read today's COB's Ceo interview with Proactive investors
http://www.*.com.au/companies/news/...wcases-thackaringa-cobalt-project-200088.html
The key part is as follow:
"we have intentionally used achievable targets and independent third-party experts to help set inputs and targets. For example:
1.
Recoveries - the study assumed a conservative baseline of 85.5% cobalt and 64.4% sulphur recovery. This compares to COB corporate targets of 90% and 75% respectively.( Duncan 04:if i may add 88% already achieved in test-work)
2.
Tailings Storage Facility (TSF) - the study assumed a significantly negative TSF NPV -$160 million. We believe there is considerable scope to reduce this burden.
3.
Power - represents almost a quarter of our site costs, this is a key cost reduction focus for us in the next phase.
4.
Mine life extension - our production target case was sub 13 years. The additional value generated by extending mine life to at least 20 years is enormous.
There are strong catalysts for the company over the next 12 months.
In the near term, a tailings optimisation study will be commissioned, whilst in the background, large-scale test work for our unique process will begin.
A comprehensive site drilling program is planned from Q3, in part aimed to prove up the long-term cobalt resource on site.
Power studies will run in parallel, and the use of distributed energy storage (lithium-ion batteries) to ‘shave’ peak power loads is being examined.
In addition to our Thackaringa focused technical studies, we will continue to assess the fit of our proprietary technology in processing cobalt in pyrite ores.
In addition:
Capital costs – The PFS delivered a capital cost of $A550 million (including $A66 million in contingencies) and approximately A$24 million in pre-strip. That’s approximately US$115,000 per tonne of installed cobalt capacity.
Compare this to an average of US$350,000 for greenfields project candidates identified (source: CRU) over the next decade. In simple terms, that’s 1/3 of the capital intensity of our global peer group with zero copper or nickel risk."
In simpler words they know what they are doing and for a PFS it was very very detailed. Contrary to CLQ which delivered a final BFS ( = what you read is what you''ll get) there is a lot of upside on COB's PFS numbers.
Keep in mind that demand for Cobalt is scheduled to increase by 90 000 tons/y within the next few years ( UBS May note) as EV penetration rises and that COB is in safe Australia, far from DRCongo..
