I’ve been in and around the investing / resources space for 26...

I’ve been in and around the investing / resources space for 26 years. Provided COB’s processing technology stacks and is scalable to the targeted project size, this company is the stand out junior cobalt company globally. As it does not rely on either the copper or nickel price to drive the final investment decision and has a low capex / opex it’s an outstanding investment. Even if a take out offer were twice the spot price the buyer would be securing cobalt at sub $20/lb over the life of mine. Have a look at what Cobalt 27 and Wheaton have just paid Vale for its future cobalt. Something in the high $30’s using an 8% discount rate.

There are lots of companies running around showing off their resource sizes and $EV / t ratios. All nonsense. If a company can only generate a mid teens IRR using long term commodity prices that are too high they’re not getting bought out or built. Nobody spends $1bn capex to generate a $1bn NPV using near spot prices and has to wait 5-6 years for payback.

COB will have a 35%+ IRR post tax when the final DFS comes out using $30/lb cobalt. My hurdle rate for investing is 25%-30% IRR post tax, meaning COB is comfortably above the hurdle rate. Find me other companies that can do the same? The risks are the cobalt price and scalability of the process technology. Supply / demand dynamics suggest the cobalt price should remain strong, the PFS should provide clarity on the scalability. The DFS will refine the costs and increased life of mine from the expanded resource.