Perspective on size and grade, page-2

In my opinion the market prices of the respective competitors is giving us different information than we are looking for.What we want to see is coloring what we are what we are perceiving.

Exclude CLQ valuations for a moment, and look at prices of cobalt-nickel spec miners. We see severely discounted values to nickel or cobalt in the ground. And of course, no value at all for scandium.

The market is giving us values of these companies which we believe present us with opportunities; but big money is skeptical of "in the ground" projects which are years away from completion.

Consider Friday's market caps in millions on selected Aussie cobalt projects:

AUZ 235
COB 144
ARL 98
EUC 67
PGM 28

Note that the market caps are more strongly correlated to the stated time to production, than they are to
the size of the resource. ARL just got killed because its time to production got moved back, it has a market cap smaller than AUZ even though by many measures, yet ARL's resource is larger than any of these.

Even COB has a higher cap than ARL, with a resource that is smaller.
Platina is given virtually no value at all.

But COB and ARL are claiming rapid, 2-3 year time to production

(whether they will achieve it or not, is another story.)

Here is a thought problem. If the ONLY thing that CLQ had going for it was Sunrise with Clean iX,
how would you value it compared to the $235 million cap value of AUZ , or the $144 at COB, or the $98 million at ARL ?

(1) One person might say, "About the same as AUZ. They got RF and a pipe to China so call it $250".
(2) Another might say, "CLQ sucks and Clean iX will be a bust. It's only worth $150 mil."
(3) A third might say, "They will have low opex, Clean iX will be great, so it is worth more, I say $400".

What you then must do is subtract that number from CLQ's market cap. What you have left over is a value the market is giving the non-Sunrise portion of CLQ, the tech and water portion, based on your assessment of the Sunrise deposit.

This is not really what we are looking for; what we want to know is the value of the cobalt-nickel portions; but it is the information the market is giving us.

My opinion is closer to (3) than the others....in fact, my valuation would be higher because on the PFS, it seems to me that CLQ will command higher valuations because it's opex margins and profits will be superior. What will the market value a producer with negative by-product costs ?

But no matter, call it $400 for Sunrise and $320 for everything else.

With a $720 million cap value, this means that the non-Sunrise tech-and-water portion of CLQ, plus a billion in platinum and 100 tons of scandium a year, give-or-take, and whatever they can put together on vanadium, is being valued at $320 million.

I am OK with this.

But I am not going to conclude that AUZ will triple, or ARL will go up seven and a half times because
Clean Teq is "over valued" on Sunrise, because the value of Sunrise is only a portion of CLQ's worth.

IMO it is an error in method to start with CLQ's valuation and work backwards, because CLQ's valuation has a lot of things in it that are not present in the other speculations.