RE: Dear RalphRalph
Terminology is everything. When I look at a spread sheet, the total (gross) revenue is in this case the value of the metal sold without deductions. In that definition, yes I would agree with you, the total revenue (not net) should be $10-12 per pound of cobalt based upon the prices today in the $16-17 range.
This is not the net revenue however. Net revenue comes after deducting operating cost - afterall, that is the cash stream that will pay off your debts. I would expect the net revenue to be in the $2-3 range with current cobalt prices, not including financing cost. I know your hypothsis is that the silver and nickel will pay the operating costs, but I am not fully convinced that is the case. With the Agnico feed, the silver will not pay half of the operating cost in my estimation. These types of hydromet facilities are very expensive to operate. I don't even want to get in to taxes, depreciation etc., but those items also reduce the profit or net cash flow.
The Phase 1 program does include global cobalt-nickel feed, but until a contract is signed for that material, it is hard to include it in the economic piture. It is a plan that must be realized and very hard to borrow money on. I've been following a couple cobalt projects in the US that might be interested in custom treatment of cobalt concentrate; US Cobalt Inc. - CDNX symbol USC, and Formation Capital - TSE symbol FCO. US Cobalt is a new company whose project is in Missouri, so not too far away. FCO is working in Idaho and has advanced to prefeasibility. I hope they are on the list of prospects.
The Agra report may disprove my estimate of operating cost. I will be most interested in its results and will cheer with improved numbers. An announcement by the company that it has secured a long term feed source, at least enough to bridge the company to production from Werner will be what it takes to put lenders minds at ease. IMO
Go to it management! and best of luck for success.