2023 Charts, page-690

Seagull, I have been thinking about similar sorts of things.

There are plenty of things going on in the wider world, war in Eastern Europe potentially expanding, the when not if with Taiwan and the prospect of a major recession in the US and elsewhere. A risk analyst would probably think that there is a pretty good chance that there will be one of those GFC/Covid level major shocks to the market coming up. Take a look at Core for example, it is progressing well but it has $140m-odd worth of shorts, that is a massive gamble and the smart money doesn't tend to put that sort of stake up without having undertaken some significant analysis.

In that context, I have been looking at AKE and PLS and the EBITDA multiples that they are trading on, which are quite low, for such cash generating business. I have looked at them and then looked at us and a few others. My expectation is that for the time being the non-producers are going to continue to be valued poorly and the producers valued on very low ratios of actual production.

In terms of AGY, we are almost a producer, if we are being honest about it. We may be a 2kt producer in a few days, weeks, months. I think when we hit steady state production around that level and have banked sales, then that will put a floor under us, on similar ratio numbers as the other producers. So any downside from there will be relatively limited, starting off a low number.

The world is changing and its all electric. The boom will return, probably after a disaster or two and a lot of rationalisation and thievery so that the major assets sit in the hands of the few, as it always has been. We can only hope the boom returns sooner than later and some future value can start to get built into the valuations.

I look at it this way, it would have been nice to have sold out at 80c but the fact is that I would probably have bought back in with 100% of the proceeds around the 60s, thinking that would have been a great buy and that I was very clever. But, now I would be looking at a tax bill and a major paper loss and not be feeling too great. For me, it's now a time for patience. It will be easy to remain patient once we hit steady state production and are permitted for expansion. I'll be happy to start to sell when we hit steady state on 12kt.

Just a few thoughts. Thanks for all your work by the way, we all appreciate your efforts.