Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : $0.50 & UNDER (Short term trades) -- Ignore unavailable to you. Want to Upgrade?

To: Ed Pakstas who wrote (503)	1/18/1998 1:10:00 AM
From: Ed Pakstas	Read Replies (2) \| Respond to of 783

Richard, I think you've got a good one here: Cobatec Inc - Interim report Cobatec Inc CBT Shares issued 30764101 1997-12-15 close $0.4 Tuesday Dec 16 1997 Mr Ed Wenger reviews the company Current projections call for total revenues of $38,882,000 in 1998, based on today's cobalt price of $32.43. The turnaround may seem sudden but it has been the focus of Cobatec's efforts for the last four years. In those years Cobatec has: Finished its $24 million processing plant in Cobalt, Ontario. It is now productive, capable of annually processing 1,000,000 lb of cobalt - and other saleable metals as recovered by-products; Perfected the proprietary Cobatec solvent extraction process, an environmentally friendly hydrometallurgical system for recovering premium grade cobalt and nickel converting them to high purity value-added cobalt and nickel-based compounds. The Cobatec process allows for maximum flow control and high efficiency metal recovery with minimum labour cost; Directed the company's activities entirely away from mining and exclusively toward processing; and Achieved the most important development of all - a long term supply agreement with the government of Cuba, which guarantees annually a minimum of 500 tons of cobalt and 1,250 tons of nickel contained in sulphide precipitates. AGREEMENT WITH CUBA The contract, a fixed price, three year term, is renewable annually after the third year and has been encouraged by the highest levels of the Cuban government and enjoys the support of the Canadian government as well. Cuba is open for business, especially to Canadian companies. Canada is Cuba's largest trading partner. Cuba appreciates Canada's role in its survival and in fact the 120,000 Canadians visiting the country each year represent more than one-third of all foreign visitors. In addition, Cuba is replete with laterite nickel ores, the source of Cobatec's supply of cobalt and nickel. The government has directed resources and infrastructure toward Cobatec's feed stock, which will begin being processed in the company's Cobalt, Ontario plant in December 1997. This feed stock contains 7%-10% cobalt, and 14%-20% nickel, with small amounts of zinc, copper and iron. With the disruption of traditional supplies from Zambia and Zaire, and the former Soviet Union, Cuba is the most exciting place to be in the cobalt industry. It has large reserves, is low cost, warm and free of labour difficulties. Cobatec is actively engaged in negotiations to expand its involvement in Cuba's cobalt production. There are possible complications, due to the US' long term antagonism toward the Castro regime, embodied in its notorious Helms-Burton Act. The Canadian government - and others - have called this legislation an attempt at imposing extraterritorial law. Cobatec is actively watching the implications of the Helms-Burton Act to ensure that its efforts are not affected by it. FINANCING Cobatec has also taken steps to place the company on a sound financial footing. A private placement of $12,000,000 in convertible subordinated debentures is planned and will be used to reduce high cost debt. In addition, by virtue of the investment in the company's plant and its accumulated research and development tax credits, Cobatec is not expected to be fully taxable for another five years. The supply agreement with Cuba will result in above average earnings and returns on investment. Cobatec expects to break even in the second month of Cuban feed stock production at a level of 18,000 - 20,000 lb of cobalt. This means at current prices, the company would be profitable even at two-thirds of forecast 1998 production. Shareholders can readily understand that, while the company has successfully completed the processing of coppercake feedstock at its plant in Cobalt, Ontario, that facility is now being prepared to begin working on the Cuban feedstock. The opportunity in Cobalt, with the Cuban materials, is so compelling that no other strategic direction can or should divert Cobatec from it. (c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com old url (better for printing)