Ann: Abra Construction 97% Complete - First Ore Stockpiled, page-21

Hardly short, now or ever. Shorts hit 4M just before the CR that wasn't supposed to happen, shorts at similar immaterial 1M shares since Sep.

The facts have changed since the mine downgrade confession and CR. The build continued well enough to plan, but shares on issue have jumped almost 30% from 475M to 615M. That means 25c historical resistance, hit twice early 2022, now represents a MC of $155M @ 25c when it used to equal $120M. Without the extra SOI, current MC equates to 33c share price pre-CR... have to be careful using TA around an expanding SOI...



G1A has cash on hand, but we haven't seen the last of development bills paid, production ramped up etc so I'm going to ignore the roughly net $20M cash on hand (ie 30 Sep $60M cash less ~$20M Acc Payable less 2 months @ $10M expenditure). G1A is valued at 50% of Abra, which has no NPV since the downgraded mine update did not deem to upset punters with such a meaningless figure. What they did release was updated undiscounted pre-tax project cash-flows, 40% down on what was being soild to the market up until the CR...



13 year mine life from today let's say, NPV probably be less than half given 10 years at 7.2% discount rate is 50% using the rule of 72. Longer mine life but higher cash flows early on, outdated opex, so many variables pick your own or the broker's, I'll use 50% FCF so NPV8% pre-tax for project value = ~$370M. So G1A at 25c MC of ~$150M for 50% equates to MC of $300M for the Abra the project on a 100% basis, vs a pre-tax NPV of ~$370M. Given that free cash figure already includes capex write-off (ie depreciation equivalent) a post-tax NPV8% might be around 25% less (less than corp tax rate), or $275M to give us an idea.... vs $300 MC on a 100% basis.

Yes, there is equity to add-back to valuation where the model assumes all capex needs to be repaid, but there is also not inconsiderable interest on $170M debt, plus exploration, corp overheads etc on the flipside. Where will the lead price settle over time, the AUD, opex costs that look way behind, ore reconciliation and metal recoveries... plenty of uncertainties, rough figures to prove a point. The point is, at this early stage a lot of the last mine plan update value is now priced in at $300M MC compared with 6 months ago... 475M shares @ 12.5c = $60M for 50% or $120M MC on 100% basis.

The above in addition to the lucky CR recipients being 100% up at 25c and I just can't see who is going to take on the risks vs diminishing upside at large volumes? Please don;t tell me buyers are chasing copper-gold upside at depth...