CLEAN TEQ HOLDINGS NPV (OTCMKTS:CTEQF) Is Today's Cobalt Focus

Volume in CLEAN TEQ HOLDINGS NPV (OTCMKTS:CTEQF) has risen lately. Many analysts have assessed the company and it has become popular on iHub. Investment sites such as CapitalCube and Seeking Alpha put out reports about Clean TeQ Holdings Limited. Thus, the stock got our attention. Have a look at the volume registered recently.SourceMining Business - The Cobalt opportunitySourceClean TeQ owns the Syerston Nickel/Cobalt/Scandium Project in NSW, Australia. We agree with Sebastien Gandon from Seeking Alpha when he says that the company is quite unique. Syerston’s mineral resources along with Clean TeQ’s proprietary ion exchange extraction know-how are said to position CTEQF ready to become a relevant "supplier of key cathode raw materials to the lithium-ion battery market – nickel sulphate and cobalt sulphate". Why is this activity interesting? Cobalt is becoming a high demand metal as it is used in the batteries for the new Electric Vehicles. We have covered large number of companies that are rushing to do the same that Clean TeQ is doing. Check those if you need more information about this promising sector.SourceSyerston ProjectThe project is located in central New South Wales, more or less 350 km WNW of Sydney. The following is the interest of CTEQF in the project.Source

"Clean TeQ owns 100% of EL 4573, overlapping MLA’s, as well as freehold land ownership over most of the project area. EL 4573 was granted on 17 August 1993 and will be required to be renewed on 15 August 2018. Clean TeQ also owns a limestone deposit to the southeast of the mine site." Source

The project was acquired from Ivanhoe Mines Ltd (TSX:IVN) in 2014. The Feasibility Study showed that the project could produce "50 tpa scandium oxide from some very high scandium grade areas." Additionally, a Pre-Feasibility Study has already been made to revise "the proposed processing flow sheet to produce battery grade nickel and cobalt sulphates - key raw materials required by the lithium ion battery sector". The following are the Cobalt ore reserves that were reported in the study:SourceA new "Bankable Feasibility Study" will be released in Q4 of 2017. Thus, market participants need to be alert. Estimates of the mineral concentration in the area may be released, which could make the share price spike.Securities owned by CTEQF's directors and a millionaire investorOn June 29, 2017, the company noted the stakes owned by some directors of CTEQF. Peter Leonard Voigt owns the following interests in the company:

• 68,873 fully paid ordinary shares 861,681
• Unlisted performance rights 2,000,000
• Unlisted options exercisable at $0.145 (14.5 cents) per option 1,000,000
• Unlisted options exercisable at $0.282 (28.2 cents) per option

Additionally, Thierville Pty Ltd and Thierville Pty Ltd ATF Star Superannuation Fund own the following stakes:

• 4,550,801 fully paid ordinary shares
• 18,106,120 fully paid ordinary shares

Does it matter? Yes, it does. The stake represents millions of dollars invested in the company. Hence, these insiders really believe in the future of the mining project. Consequently, market participants reacted to the new information the following day.SourceAre these the only relevant stockholders owning interest in the company? No, there is another multi million dollar investor, Robert Friedland. The article from Seeking Alpha describes his role in the company:

"Robert Friedland, the billionaire mining investor is a visionary. He bought into this Melbourne-based group in 2013, attracted by the ion-exchange technology and its ability to clean up waste water. In 2014, Clean TeQ acquired the world-class Syerston Nickel Cobalt Scandium Project in New South Wales from Friedland's Ivanhoe Mines. In 2016 Friedland cemented his hold on 20% of the company." Source

Good recent newsOn top of it, the company is receiving interesting news. On June 21, 2017, the company noted that it had received a cash payment of $2.6 million from the Australian Tax Office (ATO) for the Research and Development (R&D) Tax Incentive. We will see later that the company is cash rich, but new payments from the Government are always appreciated by the market. Additionally, on June 15, 2017, it was noted that CTEQF had dispatched samples of high purity nickel sulphate to potential customers in the lithium ion battery supply chain for assessment. A small number of non-binding off take Memoranda of Understanding has been signed with some clients. Hence, the company has already commenced to allocate the production of the mineral to the clients. This is a good news. Clean TeQ Managing Director, Sam Riggall, explained as follows:

“The production of high purity nickel sulphate from Syerston ore is a significant achievement in the development of the project and a critical step in the process of securing offtake commitments for the product. We have demonstrated that our proprietary flow sheet can meet the high purity specifications demanded by the battery industry. Production of samples of high purity cobalt sulphate is underway and will be dispatched to customers upon completion.” Source

Solid Balance SheetFurthermore, the financial situation is sound. The company holds more than $5 million in cash, more than $8 million in intangible assets, which may be the extraction of know-how accumulated by CTEQF, and approximately $20 million in total assets.Period Ending6/30/20166/30/20156/30/2014Current Assets (in thousands)Cash And Cash Equivalents5,3802,5462,397Short Term Investments---Net Receivables2,0081,1421,181Inventory7174886Other Current Assets2811925Total Current Assets7,7413,7824,490Long Term Investments---Property Plant and Equipment1,7341,990803Goodwill---Intangible Assets8,2679,14612,752Accumulated Amortization---Other Assets2,383441264Deferred Long Term Asset Charges---Total Assets20,12615,35918,310SourceOn the other side of the balance sheet, the amount of debts and liabilities is very small. The balance sheet is quite clean.Current LiabilitiesAccounts Payable7361,5793,044Short/Current Long Term Debt--21Other Current Liabilities3435320Total Current Liabilities7711,6143,385Long Term Debt1,9991,9143,851Other Liabilities312515Deferred Long Term Liability Charges405453601Minority Interest---Negative Goodwill---Total Liabilities3,2054,0077,852SourceConclusionCTEQF is positioned to profit from the increase in demand of the cobalt metal, which new electric vehicles require. In this piece, we saw how the insiders’ stakes in the stock excited the market at the end of June. Additionally, the company is delivering interesting news every week, such as the cash payment of $2.6 million from the Australian Tax Office and the delivery of mineral samples to customers. To sum up, be alert on this one. CTEQF is one cobalt play that big money is getting behind. We will be updating our subscribers as soon as we know more. For the latest updates on CTEQF, sign up below!Image courtesy of langgarn via FlickrDisclosure: We have no position in CTEQF and have not been compensated for this article.