I am a little more open minded to expansion than others, in the...

I am a little more open minded to expansion than others, in the near term, and I believe management still see a link between refinancing and funding for the now preferred Stage 2A.

In terms of demand and supply, demand is possibly doubling (or more) every year over the next few years, at least for first quartile product like AJM's, and supply will come from somewhere. Current spod prices will likely keep plant like Alita in care & maintenance, and will challenge PBL Stage 2, until they get on top of their costs. However, a USD60 million coarse only expansion at AJM, would seem to be one of the next "cabs in the rank", identified by off-takers. This would seem to be a relatively low risk proposition for AJM. Financial close could be 30 June, 2020, and first product I imagine by June, 2021.

There may/should be some dialogue with AJM off-takers (or ShanShan) that a higher minimum price ( say, USD600 FOB) is required before any more shovels are made ready, in the context of the current "opaque" market.

Stage 2A commitment would add material value to a rerating of AJM, particularly as we get our operating costs down towards USD300/tonne,

Stage 2A could not be funded without dealing with the residual of current AJM debt, so would have to be a "package" at the time of financial close ( 30 June, 2020).

In the interim, I am very focussed on AJM making a ( minimum) USD25 million first principal repayment 31 December, 2019 if they can. They need to hit more production records in December quarter, gather all their pennies ( no interest payable this quarter), sell Indonesian coal interests (anyone have a sense of value there?) and I would even consider a small SPP to strive to make that repayment. The optics of showing to the market that the current
USD125 million debt can be amortised over time is crucial, as is the "inverse compounding" of interest @15
%. Then, a second USD 25 million principal repayment could be targeted for 30 June, 2020, if not handled as part of expansion refinancing noted above. Without any expansion, AJM needs to show the market it can track towards a USD75 million rump of debt to be refinanced at the September, 2020 deadline.

As an aside, these USD25 million principal repayments are large and lumpy, and recent revelations about trading in AJM's debt make me wonder whether AJM may itself purchase some of its debt from the new holders, possibly at lower volumes. They may have to pay a small premium for the pleasure.

Favre