Agree with you statement that Coabalt is the key component in determining overall profitability, i have read articles stating that cobalt will drop to $20/lb an darticles stating $40/lb. Who knows it might be an in between as to where we are at now. With ni mines being shutdown and copper production dropping cobalt supply will also remain tight. Heres an interesting article to read with forecats, common uses etc for cobalt.
Personally i use a $31/lb forecatsed for next three years (not saying it's right or wrong but an inbetween). The next biggest factor is the high OPEX cost $48.5/T, that is a high cost for an oxide plant and i woudl be interested to see ho wthat is calculated, i ASSUME at time of releasing that info high sulphuric costs were factored in, which have now nose dived.
Also exploration costs arent HNC funding that ?????
So being SLIGHTLY optimistic using current spot prices and reducing the OPEX cost to say $45/T i get the following
Description Value Description Cost 45 OPEX per tonne throughput 1300000 Plant throughput OPEX 58500000Total Opex Con Notes 6000000 60M @ 10% Exploration 1000000 assuming HNC fund most Admin 5000000 general admin Total 70500000
USD/LB AUD:USD AUD/T prodn (t) revenue EBITA Cu 1.85 0.61 6824 3279 $21,917,696.07 28% Ni 5.1 0.61 15934 341 $6,283,567.87 8% Co 32 0.61 96569 431 $49,832,078.69 64% Total Revenue $78,033,342.62 EBITA $7,533,342.62
As i state i have made a few assumptions on the upside but only slightly, my point is though even in the current state of decimated metal prices the plant is not a write off. Survival is the name of the game and although i admit it may be border line and dependant on Co prices and OPEX reduction if they do get through th enext year with a profit, the upside will be huge when conditions turn. Anyway just my views.
CMR Price at posting:
25.5¢ Sentiment: Buy Disclosure: Held
