Abos, - Mate the Jorc will be whatever it will be, im expecting a bit more than you but less than many others, plus with a big fat juicy exploration target attached that can also soon be JORCED. We'll know in a few more trading days. Then theres the extension of the orebody both in width and depth with more drilling on the outlying DOF. But all this should happen (or not) over time - so next weeks Maiden Jorc is just another step in the right direction be it big or small step. Lets not get hung up on it.
But more importantly for me im changing my focus on this counter. I was in CLA with the idea that CLA could realistically likely prove up around 100 mill tons +of Co/Cu over time., and in due course there could likely be a buyout in the 400-500 mill dollar range by end 2018 eartly 2019. - fully diluted - That gave me a potential target of 40-60 cents a share buyout price by end of this yearish as ive often been saying (you all know by now I'm bullish and talking my book??? and this is ony speculation - so let me finish)
But now three things are happening that are changing my mind.
1. The type/nature of the deals we now see happening developing in the Co/nat metals space - with big end users or miners not just doing straight buy-out of juniors as I thought may occur, but JVing or doing streaming deals (ie: giving juniors money upfront for capex to get mining in order to get the guranteed offtake at benefical long term contractual prices.)
2. The fact that it now looks very likly that CLA is gonna be able to produce Cobalt Sulphate.
3. My (own) feeling that the cobalt price should go higher and stay higher for longer -possibly a decade or so.
So now im thinking CLA may now turn into a miner in a JV with an enduser. So IMO (only), my own price target is now moving up to 1$ at least by 2020ish instead of 30-50cents as before .... all things being equal (a big caveat there of course)
Why?
Disclaimer (this is all just my own rational but not totally uninformed speculation) lets say International battery or car maker XYZ backs CLA with the Capex funding (via bank guarantee/ loan or JV buy-in etc) ....which looks increasingly likely - so CLA can build a 2mtpa mine. Note
for a 4mtpa ...please double the figures below).
CLA can then produce 2mtpa at
cobalt =0.14% =2,800 tons x90% recovery = 2,520 tons Co
copper =0.5% =10,000 tons at 90% recovery = 9,000 tons Cu.
If say by then co price is (based only on my own reasonable speculation) USD 100,000 a ton and co sulphate at USD 130,000 a ton and copper cathode USD 6,000 a ton.
This is a big if ....yet to be defined in SS of course.... but from my loose calcs say it costs 45,000USD a ton to produce and process the above volumes
Then CLA could make profits of around $85,000 a ton on Co and 6,000 a ton on the extra Cu =
2,500 tons CO x 85,000 USD = 215 mill USD
9,000 tons Co x6,000 USD = 54 mill USD
=total income of 270 mill USD = 360 nill AUD per annum.
say theres 850 mill shares out by then fully diluted = 40 cents a share.
IMO We should have at least 80-120,000 tons resource proven by then - so a potential 40-60 years life of mine -so we can easily go to a 15 X PE. So 40 cents a share income x 15x pe = 6$ a share per anum profit!!.
- so lets reasonably discount that by 50% for payability issues, tax and repayment of loans and other unforseen bad things -3$ a share. (we shall ignore here the possibility of more unforseen good things)
- then for good measure lets discount it another 50% for economic/political and time risk =1.50$ per share.
Hence im now upping my own target for this share to 1$++ or better by 2020.
lets hope im even near right... as CLA and the market seems to be walking steadily in that nice direction ...step by step....
