RE:A simple man view on the cobalt swap Know this
the fort site produces 10 tons of cobalt daily
50% is 5 tons
5 x 2200 x 30 x 23$= 7.5 mil per month
.02$ per share
cobalt swap is worth .24$ a share per year
there is no deliver since the cobalt is already refined in the fort.
price risk on the swap cobalt or sherrits 50% is all the same
there is no need to complicate this.
you are correct that if cobalt price is lower then the difference will be made up in cash. And coversely if the price goes up then some of the cobalt will not be swapped.
I would expect Sherrit to continue to aggressively pay of the debt and keep earnings low, but the top of that bottle will pop off by years end. They will receive 91 mil from the swap, and somewhere around 220 mil in dividends from the joint venture. The will be virtually debt free if the wish by year end. This would pave the way to focus on growth for 2024 and expect innovative ways to boost their ROI.
cheers