quarterly report out, page-16

Re Quarterly, the operating cash revenue of $38m was easily predictable, but the operating cash surplus of $11m is disappointingly low. For some reason the net operating costs of $27m are high. From Mincor costs now included?

The combination of two things is proving to be very troublesome:

First was the timing re incurring the extra capital costs to increase Lady Annie production – just bad luck. But you can see they're now committed to spending $18.4m this ¼ - being the remainder of the development expenditure. That will use all of this ¼’s operating cashflow, plus a bit of the cash balance.

The second thing was acquiring the extra Mincor debt before Platmin is operating and proven to be a profitable producer. Have read elsewhere there are no profitable producers at present, given the current pgm prices. That must change with price rises at some stage, but disappointed there is no substantive comment on Platmin in the 1/4ly.

Lady Annie can handle the $90m debt, but it is a big ask for it to support the full $140m. The current market cap won’t help in refinancing the $45m. On the other hand, it’s probably in the interest of the existing lender to roll it if they can – but I would guess on very expensive terms, possibly with a convertible equity component.

The company is obviously cutting back on everything it’s not committed or contracted to – see forecast exploration exp is only $600k this quarter.

The 1/4ly failed to even mention progress on refinancing, when they know this is the central issue. If there’s one thing this market will punish, it’s that. Not impressed with communication.

Lady Annie and the Platmin projects must be good long-term investments. Short term is the problem.

PE