54m market cap 46m cash, page-3

Their biggest earner is cobalt, which is very very strong right now. Could of been a great company if they'd come close to meeting their original time-lines to production. Now they've missed the boat, large capex and impending cobalt surplus longer term means they might never catch it.

I've stolen the article below from the CMR thread.



Cobalt heads for record high but surplus looms
Wed 20 Feb 2008, 12:45 GMT

By Pratima Desai

LONDON, Feb 20 (Reuters) - Strong demand from the aerospace and battery industries and supply shortages are expected to push cobalt prices to record highs this year.

But expectations of rising supplies and surpluses in 2009 and beyond mean these prices for the silvery grey metal may not be sustained, analysts say.

The cobalt market is expected to see a deficit in 2008 for the fourth year running, but next year a surplus is likely as mines ramp up production.

"Demand has been incredibly strong ... We expect supply growth to remain very modest through 2008," said Dan Smith, analyst at Standard Chartered.

"The potential for significant market surplus in 2009 and 2010 is high. As a result, cobalt prices are likely to peak this year before heading down through 2009."

Cobalt prices have more than doubled since last August to around $50 a pound as the market has factored in rising demand and stoppages in the Democratic Republic of Congo and in Zambia -- two of the world's largest producers.

Prices are now at their highest level since a $53.50 a pound deal in 1978, according to one veteran trader, who added that he had heard higher numbers, but wasn't sure whether the deals had been concluded.

Analysts think prices could get to $55 a pound, and some traders are even talking about $100 a pound as a possibility.

Rising prices have also helped the middlemen between producers and consumers to tighten their grip on the market, said one metals consultant.

"Fundamentally the market is strong, but there is a suspicion that somebody is trying to hold the price up, even push it higher," he said.

LIGHTWEIGHT

A decision by Russian major producer Norilsk Nickel last year to sell all its cobalt output to U.S.-based chemicals firm OM Group helped trigger the price rise.

Cobalt supply and demand last year was estimated at around 60,000 tonnes.

Credit Suisse expects the deficit this year at 1,680 tonnes from a previous 1,000 tonnes. For next year the investment bank sees a 5,000 tonne surplus.

"Demand for cobalt for its high strength and lightweight properties continues to accelerate from the aerospace and rechargeable battery applications industries," said Jeremy Gray, analyst at Credit Suisse.

"Consumption particularly from China shows no signs of slowing and global demand for cobalt could grow as much as 7 percent per annum from 2007 to 2009."

That demand growth combined with declining ore grades, potential labour strikes, lack of infrastructure, political unrest and uncertainty about mining licences in the Democratic Republic of Congo will keep prices up this year.

But the balance is changing in favour of the consumer.

Congo's Mines Ministry said on Monday it had completed a long-delayed review of 60 mining contracts and the results were available to companies, which have until Feb. 26 to analyse its findings.

Potentially, the DRC is a major source of new supply, some of which is starting to make its way to the market.

UK-listed miner Central African Mining & Exploration Company said last week it had restarted Mukondo Mountain in the DRC, which CAMEC thinks is the richest cobalt mine in the world.

Camec aims initially to produce 400 tonnes of cobalt metal a month and is hoping to raise that to 1,000 tonnes a month by the end of this year.

New York-listed Freeport-McMoRan expects its Tenke Fungurume project in the Republic's province of Katanga to begin production in 2009 and ramp up production to more than 8,000 tonnes of cobalt a year in the first 10 years.

Many other projects are due to come on stream or raise production over coming years including Zambia's Chambishi Metals and its new Mulyashi mine, which is expected to start producing in the first quarter of this year.

"Production capacity could rise by as much as 100,000 tonnes over the next few years, if all known projects come on stream," Standard Chartered's Smith said.