Post by
YourFriendo on Jan 16, 2023 3:09pm
Cobalt Pricing / Swap
So...cobalt prices are in the doldrums...posted prices do not accurately reflect the market. If you needed to unload a lot of Cobalt right now, you'd probably be fetching 15-16$. Lots of stockpiling going on.
This is a mixed bag for the cobalt swap arrangement. On one hand, nickel is high, so Moa JV should have no problem paying a good chunk of the Cobalt dividend.
On the other hand, Sherritt needs the cash from the Cobalt to pay for all of it's ridiculousness. So they will need to monetize the Cobalt at these low prices.
This is why I was not a fan of the debt repurchase. It's better to sit on a lot of cobalt and wait until the market turns then sell it at discounted prices to pay off cheap debt.
Comment by
VerificateASAP on Jan 16, 2023 3:40pm
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Comment by
rkhosla on Jan 16, 2023 4:12pm
Friendo where are you getting this info re 'true' Co price???
Comment by
YourFriendo on Jan 17, 2023 1:10pm
Yes they are on the hook for this. But people need to understand that the cobalt swop does no guarantee a cobalt stream. It's still subject to the dividend being declared by the JV (and in turn Sherritt getting 100% of this). At current prices this should be no problem, but it seems some on this board think it's a guaranteed cobalt stream...which it ain't
Comment by
rkhosla on Jan 17, 2023 1:38pm
Yes you are correct. Up to a minimum dollar limit whether the dividends is in cobalt or in cash it will be redirected to Sherritt. Once that minimum is achieved however the dividends will be equally shared between the two partners. I cannot see Cuba foregoing cash dividends therefore they have the motivation to hit the minimum threshold so that they themselves can receive some cash.
Comment by
Nickbull on Jan 16, 2023 6:58pm
Friendo You prove you know little cheers
Comment by
VerificateASAP on Jan 16, 2023 7:28pm
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Comment by
Ernieandbert on Jan 16, 2023 7:34pm
Agreed. Friendo, maybe you should stick to looking at charts, not fundamental modeling. The debt has a very tight restrictive payments clause that precludes the company from buying back stock or paying a dividend, amongst other restrictions. To not know or understand this says a lot about your ability Go short lots of stock on your view
Comment by
YourFriendo on Jan 16, 2023 11:09pm
Strange considering a never mentioned anything about a stock by back or dividend? So what exactly don't I understand?
Comment by
YourFriendo on Jan 16, 2023 11:10pm
What point exactly are you referring to?
Comment by
VerificateASAP on Jan 16, 2023 11:38pm
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Comment by
autofocus111 on Jan 16, 2023 8:40pm
@Yourfriendo "So they will need to monetize the Cobalt at these low prices." They can't monetize it until it is received. I am not aware of the timing of the payment date. You?
Comment by
VerificateASAP on Jan 16, 2023 9:09pm
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Comment by
autofocus111 on Jan 16, 2023 9:51pm
@verificate "7) the list goes on" Sure, maybe they buy back into Ambatovy too. Field of dreams. PS: I'll post to whoever I want to. Yourfriendo made a statement and I raised thse issue of payment timing. You don't like it tough tiddies.
Comment by
VerificateASAP on Jan 16, 2023 10:22pm
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Comment by
YourFriendo on Jan 16, 2023 11:07pm
Depends on if and when they declare the dividend.
Comment by
autofocus111 on Jan 16, 2023 11:37pm
Yourfriendo "Depends on if and when they declare the dividend." Exactly, and you can't know if cobalt prices will still be 'low' at that time.