You're probably right as it is consistent with the murmurs that management were looking to do a capital raising... they probably want/wanted to get that done together with the quarterly announcement to show a nett improvement in the cash balance. On one hand saying the raising is for Federation, and also report as a nett increase in the cash in bank as a positive.
Whereas the reality is likely that operating costs are skyrocketing and margins are lowering.
Their FY23 forecasts seem like their intent is to slow production. I'm not sure how that translates to higher expenditure? Perhaps this quarterly has been less than fruitful with higher prices of diesel/operators etc etc. and they've decided to pump the breaks a bit for the rest of the year just targeting the best grade assets with lesser operating resources?
There is no sense ramping up production year on year and paying premium rates to do so only to burn through our current asset list (all with relatively short LOMs). We'll be stuck with nothing left to mine and insufficient funds (without capital raisings) to access the next wave of assets (Federation etc).
The grand irony and disappointment to all of this is "sustainability" seems to be the new buzz word for the company, and that's exactly what this company had before they acquired Dargues. Ever since they paid a once off dividend this company has been on a nosedive they've been unable to correct. It should never have happened. The decisions since have been costly.
But it can be turned around. Calculated and risk averse decisions needed from management moving forward. Preferably not by this management...! But we shall see.
AMI Price at posting:
10.8¢ Sentiment: Buy Disclosure: Held
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