Consolidated comments on various issues
TAKING ACCOUNT OF SCANDIUM...IMO anyone doubting CLQ's long-term awareness of the scandium potential is not aware of the history of the company.
The scandium is not an afterthought. Scandium has been front-of-mind from the beginning...it just has not been front-of-the promotional agenda.
Scandium was the prime motivation in the origination of the project. The name of the holding company is Scandium 21 PP.
Check out the long-term relationships with Airbus, UAC, Tim Langan, and recently Chinalco; and others;
all of which have been put in place months and years ago, and have continued unabated. A huge amount of time, energy and preparation has been put into scandium.
In 2016 a PFS was done for the Syerston as a SCANDIUM ONLY project.It pre-dated the ni-co PFS.
This 2016 scandium-only PFS considered two options:
Option 1. A small scale scandium-only scenario (the route PGM is now taking).
Option 2. Scandium as a part of a much larger nickel-cobalt project, in which the scandium would be treated in much larger quantities, but as part of the nickel-cobalt project.
What happened ? Option 2 was selected. The nickel-cobalt PFS was completed after the scandium PFS, and the scandium in the previous PFS was folded into the larger nickel-cobalt project.
Guess what. Option 2 has over 35x the scandium that was envisioned in Option 1.
ACES UP HIS SLEEVE Ever since the decision to go as a nickel-cobalt project, talk of scandium has been downplayed. Why?
There are a few obvious reasons. (Obvious now, not two years ago.)
First, the market for scandium is so small and undeveloped, it would have been impossible to stir up investor interest in it.
The attention span of the average investor is about one week. Analysts don't want to hear about things that might happen in three years.
Bankers aren't going to lend on a mine that has no world market for its output.
Just look at PGM, pitching itself as a scandium project, they have a good deposit, and the market cap is pathetic, $25 mil or so. CLQ market cap moves more in a day than the value of PGM as a company. Even today, nobody is willing to pay cap value for scandium.
On the other hand, cobalt and nickel are red hot. I am not saying that the cobalt and nickel are not legitimate targets. Obviously they are, CLQ is about to spend a billion or so on tem at Sunrise. You are not exactly revealing classified information when you say that cobalt and nickel are your targets. You attract capital, you can sell your project.
But if you have a long-term plan on a scarce commodity like scandium, there is no reason to tip your hand. Publicly promoting your goals in scandium serves no purpose. The analysts and public give no cap credit, you cannot raise project money for it, and you just serve notice to the competition about your plans. So why do it ?
My conclusion is that the scandium financials of the project, in terms of its financial impact, have been deliberately underplayed. Hidden in plain view, so to speak...ever since the PFS in 2016. This will continue through the BFS, which will not include scandium on the income
side. It is a footnote..."Potential upside". We wouldn't want to mislead anyone, would we ?
My opinion is that the FID, Friedland's Intention to Do it, was made almost three years ago; and that scandium has beena prime
target all along.
The cat will be fully out of the bag when scandium oxide take-offs are announced. Since the scandium will be incremental income with no new opex (PROFIT in plain English), it could cause the Mother of All Valuation Spikes.
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OPERATIONS AND LOGISTICS A few posters have raised various questions about the location of the facility above scandium-rich parts of the deposit, unresolved real estate issues, space available for stockpiling, and power sources.
The only one which I consider not worth investigating is the power issue. CLQ will work it out. Friedland is building power plants for the national grid in the DRC to get power to KKKW. Oyu Tolghoi got power to the wilds of Mongolia. CLQ has excellent relations with all levels of government in Australia. Friedland is a specialist in energy. So if they can solve infrastructure problems in Mongolia and DRC,
I am not going to worry about doing it in NSW. Power may be a problem, but it will be solved.
The other questions raised are legitimate questions of interest but one should revert to CLQ IR.
EXPERIENCE...I saw someone say that CLQ was not experienced in building big mines. For CLQ as a corporate entity this is true. But
the issue is not a real. If one looks at the resumes of the people involved, any concern about the company's ability to take on a big project will rapidly disappear. You cannot find a leader or a group of managers with more big-time experience than RF and his team.
COMP STOCK AND COMMODITY PRICE CORRELATIONS I have posted three week's comp data on nico-spec miners and cobalt/nickel spot prices on the "CLQ posts and links" thread.
Everybody have a great weekend ! Long, long CLQ !
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