Understanding the value of the Teledyne reserveFellow Lico players, for your consideration:
There has been much discussion on the interpretation of this important sentence about the Teledyne project, repeated in several articles:
Based on the 1979-1980 drilling results, probable and inferred reserves accessible from the current ramp are estimated to be in excess of 100,000 tons at 0.45% Co
By one estimatation, this means there is an inferred reserve of ~150,000,000$. This goes: 100,000 tons * 0.005 Co (roughly 5%) *1000 (to convert to lbs) *30 (price/lbs of Co). You can choose a higher $/lbs if you think Co will go up, but this is the basic line of thinking.
The other estimation is that the inferred reserve is ~3,000,000,000$. This assumes that 100,000 is the tonnage of Co, so you don't mulitply by the 0.005 above. It goes: 100,000 tons * 1000 (to convert to lbs) *30 (price/lbs Co).
I've left a message with Lico to help clear this up.
However, I'd like to point out an aspect of this important sentence that suggests that Lico's reserves may be much more valuable than it at first appears. The 100,000 tons referenced is what is accessible by the existing ramp. Take a look again at the map of their property. There's a lot of space there. And besides that raw space, consider that the ramp could very well be expanding on, depending on exploration results.
The objection to this line of thinking is that there could be no more Co around that isn't already accessed by the existing ramp. That could be. But it seems to me, given the area -both the veins already discovered, and the fact that the nearby town (called Cobalt) services several Cobalt mining operations- it is overwhelmingly realistic to expect that there is a lot more Cobalt in these properties than this preexisting infrastructure allows us to explore straight away.
What we are proving up, first of all, I think, is that portion of the reserve which is so easily accessible, and already well founded. These are spectacular advantages, but they do not cover the entirety of the value here. I agree with the bulls who think that this Lico/Glencore opportunity is significantly undervalued.