Assumption of Cobalt Price

The time is approaching when CLA will have to put together some rather important numbers to present to investors and lenders to justify the viability of our project.

The hot topic of current, future, and long term Cobalt prices have been all over HC.

I was wondering if people would consider picking the Assumed Cobalt price in CLA's SS, PFS, BFS...
It is, obviously, a very important assumption to set... and could have a major impact on the project if it is too high / low.

I posted this elsewhere, but would love people to run a Assumed Cobalt price picking competition for our SS.
So big, HC wants me to post it in 2 parts..
Part 1.


Here is my non-expert assessment of the fluid situation when it comes to all of the cobalt hopeful producers facing an Assumed cobalt price ...

One the one side we have what is predicted a massive possible demand... that could change, but it has been underestimated until quite recently.

On the other side we have what is also predicted to be a massive possible supply thanks to the soaring Cobalt price... a lot of it is pie in the sky stuff with mines that will only be viable with an unrealistic cobalt price long term...

Here is the historic cobalt price.

View attachment 1015675

Here is the thing... the (average) long term Cobalt price is not particularly high...   cautious lenders will want to weigh any price assumption downwards as much as possible to remove risk in any financial assessment of any loans...  that may kill of many quite viable mines going forward, but should also underpin the cobalt price as a result.

Lets look at another Maquarie publications and stated predictions/assumptions:
They have stated here (2018)
and here (2017)

"Cobalt prices present upside risk: Spot cobalt prices have continued to
grind higher and currently sit around US$28/lb. We note our development
scenario and valuation for Syerston is based on our long-term nickel and
cobalt price assumptions of US$6.80/lb and US$12.50/lb"

So for the last 12 months they have advised anyone who asks to assume long term cobalt price is US$12.50/lb...  quite conservative considering that for the last 12 years it has been above that price some 90% of the time.

I just don't see lenders or companies making that assumption when making their BFS and lending decisions on loans... why ?