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written by reader Scandium, Cobalt, and Water Purification: CleanTeQ Holdings

By hendrixnuzzles, February 6, 2017

A Microcap Teaser Solution In Advance !!
(Australian stock exchange CLQ, OTC pinks CTEQF).
CleanTeQ is sure to be the answer to future teasers you will be reading about from resource gurus, To save you all the trouble of solving them, I decided to write this article.
My portfolio was grotesquely overweight in gold and silver positions, and in moments of anxiety I thought it would be a good idea to diversify and take a few positions in something other than gold mines, royalty companies, Mongolian exploration companies, and small-cap copper miners with major operations in the Democratic Republic of Congo.
Thus I made a small speculation in CleanTeQ, solely on the basis that mining titan Robert Friedland was the Chairman, and CleanTeQ was the only resource company I could find that seemed to be in a position to mine scandium, a very rare metal that sells for a couple of thousand dollars a kilo.
My due diligence was so slight that I was embarrassed to emphasize my position to the readers at Stock Gumshoe. We are supposed to study these things a little more than I did for CleanTeQ. And after entering at 50 cents, the stock promptly dropped to 35 cents or so, making me glad that I did not look foolish by publicizing my position.
As the weeks went by, I started to find more information on the company that I should have found out beforehand. This was partly accidental, partly from other Gumshoe readers, and partly from new announcements and company news that occurred after I took a position. But the findings were all very positive, and because the company is so interesting I thought it warranted its own thread apart from the hard asset thread which I moderate.
I have a full long position and high hopes. And I thank Secretsquirrel, Griffin, Larry McKenna, and several others who helped fill in the missing pieces of the puzzle.
Below are my findings, opinions, and summary on CleanTeQ Holdings:
BUSINESS MODEL CleanTeQ is a hybrid company based with three bases: scandium mining and production, cobalt mining and production, and water purification. This seems like an odd combination, but as you will see, it is not. It is a stroke of genius. And I will explain why we should care about scandium and cobalt.
(1) The company is starting production of the Syerston mine, the world’s only scandium mine;
(2) The company will also produce significant amounts of cobalt as a co-product to the scandium;
(3) The company has a large-scale water purification technology, which will target municipalities,
Industrial operations with waste water problems, and mines, which also have water problems

PROSPECTS FOR THE THREE SEGMENTS
(1) Scandium is a very rare metal that usually occurs in only small amounts that are not economical to mine. It is mostly available as a by-product and the market is opaque, usually between private parties. Scandium has very beneficial applications in aerospace, aviation, and technology, but has not been widely applied because there is not a sufficiently reliable supply of it.
(2) Cobalt is essential in many batteries. Lithium gets all the investment press, but a majority of the battery formulations need cobalt, which is rare compared to lithium. Cobalt has a similar supply situation as scandium, it is mostly a by-product and is not commonly a prime mining target in and of itself. But demand for the electric energy market is growing rapidly and cobalt demand is growing and will continue to grow accordingly. Supply chains on cobalt are iffy.
(3) Water purification is a pressing need throughout the world. Cities with lots of people, industrialized places with lots of factories, or mines with waste water, all have a real and pressing need for large scale water purification. I think most people can accept this premise of widespread demand without a lot of documentation.

HOW DO THESE SEGMENTS RELATE TO EACH OTHER ? I cannot get too technical about the water purification technology, but I will try to explain what I understand, and how it relates to the scandium and cobalt operations. They call it Continuous Flow Ionization. Ionization is not a proprietary technology per se, but CleanTeQ has developed a way to implement ionization in a continuous feed, automated loop that improves volume, improves economics, is reasonably priced for installation, and can be custom-modified to specific waste problems. It can be used in conjunction with other filtration techniques. Further, it can be modified TO EXTRACT CERTAIN SUBSTANCES from the feed waste water. This is done by modifying the resins that are used in the ionization process.

Now it so happens that CleanTeQ has developed resins that can extract scandium and cobalt from waste water. So they potentially will have commercial sources of rare metals from the by-product waste of their water purification process !

HOW CLOSE IS THE WATER THING TO REALLY HAPPENING ? It is happening. CleanTeQ has signed a memorandum of understanding with a major Chinese municipality to implement their technology. There is a joint venture, 55% Chinese/45% CleanTeQ. Once the first one is up and working, China has a mind-boggling potential for water purification. For their teeming urban centers and for their mining and industrial locations, shall we say the potential is very large ?

CleanTeQ has 100% of rest of the world. CleanTeQ is closed-mouthed about other commercial sources, but they let on that they have been in contact with the likes of GE, Dow, and other big hitters. They state a pipeline target of $100 million by 2020; I predict they will do much better.

HOW CLOSE IS THE COBALT THING TO REALLY HAPPENING ? Very close. Battery useage is soaring and is the strategic target of many governments, corporations, and environmental groups. Batteries need cobalt.

HOW CLOSE IS THE SCANDIUM THING FROM HAPPENING ? This will take a while because the applications are high tech, with long lead times, and there is only one scandium mine in the world (CleanTeQ’s newly commissioned Syerston mine). CleanTeQ intends to develop the scandium market by being a reliable source of supply, and by driving the price down.
CleanTeQ will have viable margins with scandium prices up to half of current prices.

To give you an idea, the Russians made a few MIGs with scandium/aluminum alloys. They were faster, lighter, stronger. An addition of 0.5% scandium to aviation aluminum strengthens the frame, removes the need for riveting, reduces weight, and makes repairs easier. . The Russians dropped it because of costs; and Boeing and Airbus will not use it without a reliable source of supply. But there is about to be a reliable source of supply: CleanTeQ.

WHAT ABOUT IP PROTECTION ? I believe the IP and know-how moat is sufficient. CleanTeQ holds a perpetual license from a high-level Russian research organization that provided some of the foundation technology. I am not a patent lawyer and a lot of the know-how will be proprietary, not patented. CleanTeQ has been at this for over ten years, I think the barriers to entry are sufficient.

MANAGEMENT Totally a plus. Robert Friedland is the Co-Chairman and CEO, he has 20% of the company, great credibility and clout with the Chinese, and an unbelievable track record in mining. Sam Reggall is the other co-chairman. I know little about him, other than from my observations of him on an Australian investment show that aired last week. He was impressive.

MONEY AND FINANCES I don’t think there is anything at all to worry about. Friedland must be worth billions, the Chinese are in, and the concept has enormous potential.

Sources: as I mentioned, information is scant. My sources were the CleanTeQ website, presentations and and interviews with Friedland and Reggall, and the sketchy information on the brokerage sites. Nothing you cannot find on your own.

Long CleanTeQ

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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SoGiAm
February 21, 2017 9:16 am

Clean TeQ wins CRC-P Grant with Partners, Ionic Industries
and Monash University http://clients3.weblink.com.au/pdf/CLQ/01830408.pdf

Issue of Clean TeQ Options
http://clients3.weblink.com.au/pdf/CLQ/01830253.pdf

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Jeffrey M
Jeffrey M
February 21, 2017 2:15 pm

Hendrix, a big thank you on $IVPAF and $PVG (long both). I just took a starter position in $CTEQF today. I appreciate the research that you put into the names that you post about

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Johnnn
Guest
Johnnn
February 21, 2017 4:59 pm
Reply to  hendrixnuzzles

Hi Hendrix do you have a link to Friedland’s press conference in Africa on clean teq you could share? Thanks
*Btw I see HotCopper are talking about a US roadshow for CTEQF in March

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Johnnn
Guest
Johnnn
February 21, 2017 11:26 pm
Reply to  hendrixnuzzles

Yes I’m well aware of CLQ / CTEQF business and backers. Just as impressive is Australia’s largest super fund getting involved 🙂 the top 20 btw is littered with ‘big names’ in the Australian share scene.

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secretsquirrel
secretsquirrel
February 22, 2017 10:14 am
Reply to  Johnnn

The presentation was only available for a few days through https://www.periscope.tv/ then it disappears which is usual.

wfuiii
February 21, 2017 9:21 pm
Reply to  hendrixnuzzles

Thanks for such an informative post as most of yours are. I have followed much of your advice and it has put a lot of green in my portfolio. Soon to be long in $CTEQF but minus one of my thumbs:) Up of course!

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secretsquirrel
secretsquirrel
February 22, 2017 10:25 am
Reply to  hendrixnuzzles

Excellent post hn of CleanTeQ and it’s many positives for dealing with the future, which they are addressing, more than very clever IMO.

So many bits of scattered news coming out. This stock is really exciting! Nothing more to add except to say very long ASX:CLQ

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secretsquirrel
secretsquirrel
February 23, 2017 12:41 am

CleanTeQ and Ivanhoe mentioned. …

http://blogs.barrons.com/emergingmarketsdaily/2017/02/22/7-commodity-winners-in-electric-car-revolution/

Emerging Markets Daily
News, analysis and actionable ideas about emerging markets.

Search Emerging Markets Daily

February 22, 2017, 10:20 A.M. ET
7 Commodity Winners In Electric Car Revolution

By Dimitra DeFotis

As Tesla (TSLA) ramps up U.S, production of lithium batteries for electric cars and expands into emerging markets, the ridership revolution will have a profound impact on commodities.

An AB team of market experts headed by metals Analyst Paul Gait ranks the commodities that ought to benefit the most: 1. Copper, 2. Nickel, 3. Cobalt, 4. Graphite, and then behind: 5. Lithium, 6. Manganese, 7. Aluminium. But they add that current commodity prices don’t support the required demand for copper. They write:

” … innovation in batteries is enabling an electric revolution that has massive ramifications. … It took 120 years to build the modern copper industry. The electric vehicles revolution could require the supply base of copper to double again, but this time in only 20 years. This will be a prodigious feat and is simply unachievable at today’s commodity prices. … the total requirement is 35.8 million tonnes of copper equivalent production within the next twenty years…. the real issue is how the supply side moves to accommodate [demand] and what the price elasticity of supply is. Where commodities are economically scarce, any increase in demand growth beyond current levels will be very hard to meet.

Assuming that the transition to EVs [electric vehicles] does take place, the global mining industry will need a capital increase of between US$350 to US$750 billion. But … the capital increase is highly concentrated in … copper, nickel and cobalt. … Lithium is an abundant commodity where very little new capital is required to deliver all the supply that we will need to enable the EV transition.

Which equities could offer the appropriate exposure? Being long electric vehicles further down the value chain comes down, for investors, to answer the question as to which player will emerge as the winner in this revolution – the risk being to back the wrong horse. However, by gaining exposure through raw materials, one can eliminate that risk: all producers of the key commodities identified above should benefit through the appreciation of commodity prices.

Equities AB thinks will benefit include a mix of Canada, Australian and United Kingdom companies that trade over the counter in the United States: Ivanhoe Mines (IVPAF) (copper), which also trades in Canada and Germany; mining and commodity-trading play Glencore (GLNCY) (copper, cobalt & nickel); First Quantum Minerals (FQVLF) (copper, nickel); Clean TeQ Holdings (CTEQF) (non-covered, nickel & cobalt) and Syrah Resources (SYAAF) (non-covered, graphite).

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Johnnn
Guest
Johnnn
February 23, 2017 4:11 am
Reply to  secretsquirrel

Big day on the ASX for CLQ – CTEQF should follow suit. People waking up to Robert’s new 10 bagger.

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secretsquirrel
secretsquirrel
February 23, 2017 10:27 am
Reply to  hendrixnuzzles

hn,

If you mean yesterday’s it was 3.113M

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mhardin54
Irregular
mhardin54
February 23, 2017 1:16 pm
Reply to  hendrixnuzzles

New to post, have been watching & profiting from HN & others. Consider $SJL, Saint Jean Carbon Inc, as a battery, technology manufacturer. Thanks to all the gummies, I hope to be more active.

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Griffin
Griffin
February 23, 2017 3:09 pm
Reply to  mhardin54

Re-cycling lithium ion batteries interesting idea. This may not have any short term significance, but definitely worth watching. thanks for posting.

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niizajim
February 25, 2017 12:09 am
Reply to  Hendrixnuzzles

I want to get some soon, but waiting for $AUPH and $PLX to explode and then I will have some cash to invest. Unfortunately, it already started moving here the last couple of days.

Thanks for your work on this one Hendrix!

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secretsquirrel
secretsquirrel
February 25, 2017 7:27 am
Reply to  hendrixnuzzles

Here is the direct link – https://hotcopper.com.au/asx/clq/

This one is definitely on the move.

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hedy1234
hedy1234
February 25, 2017 8:25 am
Reply to  hendrixnuzzles

Any thoughts on Ivanhoe”s 10% loss this week?

1.31 x .75 = 0.98…..

alanh
February 25, 2017 9:03 am
Reply to  hedy1234

Hedy: Having taken someone elses brokers advice, I say yippee. I sold and bought back for 10% saving 🙂

secretsquirrel
secretsquirrel
February 25, 2017 9:11 am
Reply to  alanh

hedy, none of the fundementials have changed.

Now 12 drills in action, expect announcements coming soon.

Plenty to read on the matter here –

http://www.stockhouse.com/companies/bullboard/t.ivn/ivanhoe-mines-limited

hedy1234
hedy1234
February 25, 2017 9:15 am
Reply to  alanh

Well done. Did you add shares or take profits?

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alanh
February 25, 2017 9:17 am
Reply to  hedy1234

Yes!!

alanh
February 25, 2017 9:27 am
Reply to  hendrixnuzzles

Thats always the risk, but my experience (in both senses of the word) shows a better than 60/40 gain….this espec with bio where the odds of trial success is 1/10. Sometimes you get lucky by harvesting at the right time and narrowly avoid a price crash. As you say, ”Lots of different strategies can make money”. Each to their own. At least with this mining stuff I dont have to contend with all those 7 syllable words……I have a fair idea of what ‘drill’ means.

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alanh
February 25, 2017 9:10 am
Reply to  hendrixnuzzles

….A few moths!!!! LOL

hedy1234
hedy1234
February 25, 2017 9:10 am
Reply to  hendrixnuzzles

Just checkin. Copper has backed off as well.

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hedy1234
hedy1234
February 26, 2017 8:50 am
Reply to  hendrixnuzzles

Can you simply stockpile the scandium you find?

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alanh
February 25, 2017 9:21 am

All: Ive only recently joined this/these threads (Derhh me!) I have to say they are great. They remind me of the bio threads of old days before they got too big to comfortably follow. I enjoy hanging out with friends as much and more than investing in ulcers.

Johnnn
Guest
Johnnn
February 25, 2017 6:31 pm
Reply to  hendrixnuzzles

CTEQF Co Chair Sam Riggall…Robert Friedland’s go to man and second in charge under Sam Walsh RIO and Andrew Mackenzie BHP.

http://www.theaustralian.com.au/business/companies/mining-man-sam-riggalls-lessons-from-the-dairy-farm/news-story/d35c7dff9d34fc9218c0f56f288d3b1a

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hedy1234
hedy1234
February 25, 2017 6:40 pm
Reply to  Johnnn

Requires a subscription.

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Johnnn
Guest
Johnnn
February 26, 2017 9:12 am
Reply to  hendrixnuzzles

CTEQF is undiscovered in the US. tick tick

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secretsquirrel
secretsquirrel
February 26, 2017 11:26 am

Electric carmakers on battery alert after funds stockpile cobalt Race to secure supplies of key material used in lithium-ion batteries

Suppliers to Tesla and other electric carmakers are scrambling to
secure shipments of the key battery material cobalt after a group of hedge funds amassed a large stockpile of the scarce metal

In a bold wager on higher prices, half a dozen funds, including Swiss-based Pala Investments and China’s Shanghai Chaos, have purchased and stored an estimated 6,000 tonnes of cobalt, worth as much as $280m, according to the investors, traders and analysts.

The stockpile is equivalent to 17 per cent of last year’s global production of the metal. Increasing use of batteries containing chemical forms of the metal by Chinese electric carmakers, alongside ambitious plans by the likes of Elon Musk’s Tesla, have created a fertile backdrop for speculators hoping to profit from swelling appetite for cobalt, which boosts the power of lithium-ion batteries.

They are betting that demand for electric vehicles will exceed market expectations and push the up the price of cobalt as battery makers such as Panasonic, which makes battery cells for Tesla, rush to lock-up supplies of the material.

Global demand is already expected to outstrip supply this year by 900 tonnes, according to commodity consultancy CRU. It estimates demand for cobalt will grow 20 per cent a year for the next five years, thanks to buying from the hybrid and electric car industry whose production grew by 41 per cent last year.

The price of cobalt, which is mined almost exclusively in the Democratic Republic of Congo, has jumped more than 50 per cent since November to $21 a pound and could rise further. Prices rose to peak at about $50 a pound in 2007, before dropping to a low of $10 in 2015.

There’s a complete vacuum out there (in terms of supply) Tony Southgate, Engelhart Commodities “There’s going to be bigger demand for cobalt,” Ivan Glasenberg, chief executive of Glencore, which controls almost a third of the cobalt market, said on Thursday. Each dollar rise in the price of cobalt generates about $55m in earnings for the company.

Tesla began production at its battery “gigafactory” in Nevada a month ago, sharpening its need for the metal, according to traders. Tesla did not respond to an email seeking comment. Pala Investments also declined to comment.

“End consumers worried about future price increases have been looking to fill their [stocks] and at the same time you’ve had some speculative buying from the hedge funds,” said Edward Spencer, an analyst at CRU.

With few pure cobalt companies listed outside China, hedge funds have been forced to buy physical metal to express their bullish view on the metal. Although the London Metal Exchange has a cobalt contract, it is not heavily traded.

“They quite rapidly decided that buying physical cobalt was the only way to get proper exposure to the cobalt price,” one trader said.

Still, traders warned the funds could have difficulties selling the metal for a profit, because the cobalt market is relatively small and release of new supply could quickly send prices lower.

About half of the annual consumption of cobalt comes from the electric vehicle industry. While carmakers have been trying to reduce the amount used, that has been difficult because of its ability to improve battery stability and capacity.

China is also helping to generate the bullish predictions for demand. While the country’s electric vehicle industry has in recent years relied on batteries without cobalt, carmakers have started to switch. Goldman Sachs analysts estimate China’s use of cobalt in electric batteries will almost double by 2025.

Cobalt’s price surge has led some battery makers to buy more cobalt in the spot market, further benefiting the funds that have stockpiled the metal. “There’s a complete vacuum out there” in terms of supply, said Tony Southgate, a cobalt trader at Engelhart Commodities in London.

https://www.ft.com/content/4f88cb60-f8f7-11e6-bd4e-68d53499ed71

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renbycage
renbycage
February 26, 2017 6:27 pm
Reply to  hendrixnuzzles
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renbycage
renbycage
February 28, 2017 6:54 am
Reply to  hendrixnuzzles

LOL, lets hope these businesses are not a hallucination. The guy is quite a character.

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Johnnn
Guest
Johnnn
February 26, 2017 4:52 pm
secretsquirrel
secretsquirrel
February 26, 2017 5:22 pm
Reply to  Johnnn

Thanks Johnnn,

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Griffin
Griffin
February 26, 2017 6:50 pm

$CTEQF – Senior Executive Appointment – Syerston Project Director

Clean TeQ Holdings Limited (CLQ:ASX; CTEQF:OTCQX) (‘Clean TeQ’ or ‘Company’) has appointed Mr Scott Magee as Project Director for the Syerston Nickel/Cobalt/Scandium Project . Scott will lead the Syerston team through the completion of the Definitive Feasibility Study (‘DFS ’) and into project construction and operations .

This looks like a real plus to me “Scott is a people focused, innovative project management executive with 28 years’
experience in project development, project delivery and project governance. Prior to joining Clean TeQ
Scott worked for BHP Billiton as Vice President Projects where he was responsible for project governance and establishing best practice processes that improved predictability and capital effectiveness across the $15B annual capital projects portfolio. ” . I would think that Magee sees something in this company and has the experience to make it happen.

https://gallery.mailchimp.com/6b234a59bc4b0bc555986937a/files/e5d627fe-6a77-45b1-8d50-b9aa9d99c8c7/20170227_Scott_Appointment.01.pdf

$CTEQF long

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secretsquirrel
secretsquirrel
February 26, 2017 7:03 pm

Hope this opens as took forever trying to get copy link.

Release Date: 27/02/17 08:05
Summary: Clean TeQ Presentation – BMO Capital Markets Conference

https://drive.google.com/file/d/0ByAoKs9L_p0xck1wd0FMX2JJaGM/view?usp=drivesdk

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biotechlong (btl)
February 26, 2017 8:50 pm

$CLQ (long)

CLQ SP at AUD 0.93 (up 10%) 3 hours into ASX 2/27 trading day.

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hedy1234
hedy1234
February 27, 2017 5:12 pm
Reply to  hendrixnuzzles

Helps some to offset 20% down on Ivanhoe over the same period.

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SoGiAm
February 26, 2017 10:55 pm

$CLQ, CTEQF sm position – Appendix 3B
New issue announcement, application for quotation of additional securities and agreement
http://clients3.weblink.com.au/pdf/CLQ/01832811.pdf
from http://www.cleanteq.com/investors/asx-announcements/

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hedy1234
hedy1234
February 28, 2017 4:44 am
Reply to  Johnnn

Cannot read without subscription.

secretsquirrel
secretsquirrel
February 28, 2017 3:39 am

Pretty shocking stuff.

Friedland mentioned this previously.

Sooner CleanTeQ gets going the better…..

Four-year-olds mining cobalt for phones

http://www.skynews.com.au/news/world/africa/2017/02/28/four-year-olds-mining-cobalt-for-phones.html

Meet Dorsen, 8, who mines cobalt to make your smartphone work

http://news.sky.com/story/meet-dorsen-8-who-mines-cobalt-to-make-your-smartphone-work-10784344

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johnnn
Guest
johnnn
February 28, 2017 5:08 am
Reply to  secretsquirrel

Massive aftermarket ASX announcement out for CLQ / CLQTF!! Chinese are in!!

johnnn
Guest
johnnn
February 28, 2017 5:09 am
Reply to  johnnn

that should be CTEQF!!

secretsquirrel
secretsquirrel
February 28, 2017 6:08 am
Reply to  johnnn

Thanks,
Can you provide any links or who etc.

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