If share price stays at 68c, exercise price for upcoming loyalty...

If share price stays at 68c, exercise price for upcoming loyalty options will be 85c.
If five day (~2 - 8 May 2017) average share price is 80c, exercise price will be set at $1.
If average share price is $1, exercise price will be set at $1.25
My estimate for the exercise price of upcoming loyalty options, is between 85c and $1.25

My reasons being:

1. Largest resource with lowest valuation.
CLQ's enterprise value is Eight times of ARL's.
ARL has massive nickel and cobalt resource, in ground value worthy A$100b, plus Lewis Pond zinc-gold project, WA gold prospects etc.

2. Busy news flow ahead.
Next week will have,
- Assay results for Lewis Ponds
- Quarterly reports by next Friday
Then, Free options in 2.5 weeks,
More drilling news for Kalpini, Black Range, Goongarrie.

3. Shadow and easy to mine.
As with all cobalt-nickel mineralisation throughout the KNP Cobalt Zone, mineralisation at Kalpini occurs in subhorizontal bodies usually within 20-40 m of surface. The mineralisation has developed near to surface as particular ultramafic rocks have weathered and broken down over the ages. This style of mineralisation is therefore very soft and, given its geometry, is very easy to mine.

4. Large institutional buys mainly from Instinet since the ipo 9 Feb 2017.

5. Risk is the extraction process.
Previous owner HRR tried DirectNi, then Simulus, they were happy with Simulus and invested in Simulus.

6. My NPV Exercise using 2014's cash cost and CLQ's PFS prices, coming up with similar NPV as CLQ.
It's an estimate only but the result is surprisingly exceptional.



Here's an example for free loyalty options:

- If holding 30,000 ARL, you are entitled to receive 10,000 options for free.
Then your option's value is exposed to the upside (0 ~ $37,500 or more).




DYOR.