Hi Marcus, Dmac, and others,
Was in PGM, love the deposit, bailed when Mosig left but have been watching for re-entry.
This might be the week for me to go back in.
My expectations are low, in terms of PGM coming to production on its own; though I suppose the low-capex smaller scandium operation might fly, if one of the bigger boys on the block can get things going with an off-take.
I believe the smaller project strategy is a mistake, because Uncle Bob is going to be able to crush everyone on costs. The fully allocated C1s at Sunrise on a co-product basis will be incredibly low;
probably under $10; and as a by-product, of course, there is no allocated scandium C1 costs at all, because at Sunrise the scandium will be a by-product. So how will PGM attract capital with a cost of $468 A KILO, when Neighbor Bob is stockpiling it for less than $10 a pound ?
So why am I interested in re-entry ?
1. I believe the scandium market will accelerate very rapidly with high prices, and PGM will be an attractive takeover. CLQ is the preferred partner. Prices are stupidly low right now. Scandium is going to be hot, even if Hartley's strategy is not. I did not like Hartley's strategy but it might work, as rotten as things look right now.
2. The inclusion of 10 tons of scandium in the CLQ BFS is a tip-off. IMO it is there just to establish scandium as acceptable in the BFS, as a pre-cursor to a big take-off. Tell me why Boeing, Chinalco, and Airbus are mentioned in a spec mining BFS, and why, after months of saying scandium will not be included in the BFS, an amount equal to current world production is slipped in like a footnote.
2. Prices are stupidly low right now.
3. Skaergaard is a long-term asset one is getting for zero. Prices are stupidly low right now.
One other thing. Did I mention, prices are stupidly low right now ?
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I wouldn't worry too much about Bloom Energy, though it would be nice to have.
I did some very rough math; an aircraft like a Boeing 767 that went all-out with scan-alu alloys to lose weight might have 500 to 800 pounds of scandium in it. Sell 25 or 30 of these a year, and Boeing or Airbus or Lockheed would need an amount of scandium equal to current world production, for one model of a successful plane. Then you will have every military in the world needing scan-alu for rockets and planes. My point is that even much larger production on scandium may not crash the price a lot. The amount currently produced could be loaded onto a truck. There is a long way to go.
CLQ has stated the "price at which they believe" market demand will be stimulated is $1500 per kg.
Take a minute and realize: They did not come to that conclusion by looking out their office windows and wondering about it. They have been talking to Airbus, Chinalco, and UAC. I say a take-off is imminent that will catalyze scandium.
This will be good for PGM holders, whether Owendale gets to production, or PGM gets acquired.
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