and this is his number 1 cobalt junior, and I suspect it is by a very wide measure. From his seeking alpha article several months ago. He does this full time, the entire sector, number 1 guy. Reviews a hundred or more companies, together with keen focus on the EV auto demand. (fwiw):
"The current market cap of Ardea Resources is just AUD 61m, which is incredibly cheap when looking at their total resources, not to mention the AU$50m previously spent on the project (drilling etc). The reason the company is so cheap is the company is still in the early stages, laterite ore projects have higher CapEx and production costs (than sulphide ore), and perhaps because nickel prices are currently depressed making many nickel mines uneconomic at current prices (US$
4.65/lb). Off course those mines don't have as much cobalt as Ardea has. A comparable cobalt laterite company is Clean Teq [ASX:CLQ] which has about 114,000 tonnes of cobalt, nickel and scandium at their Syerston project in Australia, and is about 16 months further advanced (a DFS due Q4, 2017) with a market cap of AUD 452m - 7.4 times higher than Ardea Resources. I have done some very basic and rough modeling on Ardea not yet to be relied upon. Purely as a cobalt mine with nickel and scandium as by-products, if we assume 5,000 tonnes pa cobalt production, at US$10/lb cost of production, US$25/lb sale price, 5% royalties, Capex at AUD 300m ($200m equity, $100m debt) then I get a valuation of A$4.07, or 4.47x upside. I plan to model properly once more accurate information comes to hand. Obviously Ardea's economics are sensitive to nickel and cobalt prices.
The company plans to release a PFS in January 2018, so we will know a lot more accurately then. Following that I would expect if they can raise CapEX funding that they could be in production by 2020/21 if all progresses well."
Investors can view their April 2017 company presentation
here.
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NOTE TO MYSELF: It is so easy to get wigged out at the volatility but Matt is a very serious investor, knows the top 100 companies, a brain who does this day in and day out. He is saying we are perhaps 25% fairly valued, at current cobalt pricing, a tremendous discount rarely seen, and I have been investing my own dough for 30 years. His proprietary articles are quite data specific. More than almost anybody, from an investor perspective. - 1panzer
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