Very encouraging turnaround

I think this is the first time I have ever started a thread, but the STA boards have become quite the sewer in recent months, dominated by a club of non-holders, adding not much value.

For my part, and reflecting on the Annual Report and the minimal information made available to shareholders over the last year, it does seem that there has been a steady and encouraging turnaround, in production rate and quality.

While we have not been given production rates for July to September, the AR notes the plant's continuing strong performance towards nameplate, so I am guessing 45-50kt for the September quarter.

Pleasingly, we are told 3 shipments totalling 46kt were made in the quarter, averaging a new high of $902/t, reflecting the claimed higher HMC grade, and bringing in $41.5 million for the quarter. Some of that shipped product would have been in stock pre 30 June, so hopefully the product we are now producing in October is even more valuable.

On my reckoning, Coburn probably went cashflow positive around early July, on a 'normalised' basis, and hopefully the September Quarterly can confirm that. Revenue run rate now may exceed $160 million, though the mid- term HM grade may challenge that.

Comments about the MSP trial are at best opaque, but the hopefully conservative carrying value calculation as at June suggests a restart in May 2025 is at least part of the scenario.

That valuation at $281 million is based on a very high 17% pre tax WACC (I think), so it would not be hard to see another few months of continuing improvement, and then stability, justifying a much lower rate and a project value in the $350-375 million range, imho. Operating leverage should continue to be shareholders' friend in coming months, or it won't, but we have little downside.

Unfortunately, it has taken a long time to get to this point, and my rough calc of net debt as at Oct 1 is now around $240 million (debt 233, accrued interest & fees 25, less cash/stockpile 18).

I suspect the high interest bondholders will not be happy or so patient, but having NAIF in our corner is a huge benefit at this time, imo. This Federal body will want to share in the success emerging at Coburn, if trends continue, and without being silly, not as 'mortgagee in possession'.

Hopefully, there is a recap on the table pre 30 November where we can replace most of the high cost bonds with further equity.

At least it seems to me that the Board's high stakes gamble to put 'Tanzania' into the black hole of Coburn earlier this year may well have paid off.

I am imagining material dilution from last trade prices for non-participants, but not so much to extent that holders are given opportunity to re-commit. But of course, with such operating and financial leverage in play this quarter, there may well be further surprises, in either direction.

Very interested to hear views of others, but hopefully, like our HMC, we get a little bit of a quality upgrade now.