The stanwell agreement is the noose around this company (as well as poor managment). Why they would wish to extend being under this onerous contract is beyond me, the last thing I would wish is for a similar arrangement to current being extended. There are two parts to the contract that hurt CRN 1) Discounted coal sales and 2) royalty on other coal sold. 1) is valued at (comparing current CSA to NCSA) approx 65 million US per annum 2) is worth approx 100million US per annum.
With the new ABL and the 2 x 50mil 'buckets', the run way to 2027 NCSA seems to be extremely derisked. If one backs out the helpful 40mil working capital move as needing to be rebalanced, we should still make it with a better risk/reward basis.
Would management be attempting to gain funding for Mammoth Part 2 by doing this??
Any variation needs to keep the royalties dying in 2027 in my opinion to achieve a pass grade and even then.. I'd prefer they didn't.
CRN Price at posting:
16.8¢ Sentiment: Hold Disclosure: Held
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