RE:RE:Here ya go Collins et al!See comments in red:
Re your - Disagree on a few points:
1) They have only hit 16,500 once in the last 5 years.
Not correct. Look at 2016 and 2019. More importantly I think is what they produced relative to their beginning of year guidance. Over the past 5 years on nickel production they missed guidance in 2020, exceeded it in 2019, met it in 2018, failed to meet it in 2017 and met it in 2016.
2) I think you are underestimating input cost rise.
Maybe but I believe there is more torque in cobalt credits then there is in other input costs in a rising market for commodities.
Plus you have to add C2 cost as those a real cash costs.
Yes, I agree and I said that in my initial post. Mining, Processing and Refining costs (C2 costs) were an incremental 26 cents per pound in Q4 2020 but an incremental 73 cents per pound over the course of 2020. As I said, this will reduce cash flow. If we use the mean of those two numbers or 50 cents on 36.4 million pounds just for representations sake that is about a $18m cash flow reduction. Investors can adjust higher or lower depending upon their view of the situation and a more detailed review of the historic experience which I have yet to do.
The point of this exercise wasn't to offer an opinion but rather a framework for calculating cash flow. Investors can then input their own numbers and come to their own conclusions. That includes production volumes, NDCC, C2 costs, cash flow multiple and of course commodity prices.