@edshannFirstly, I have been an accountant for 20 years. I know...

@edshann

Firstly, I have been an accountant for 20 years. I know exactly what to look for in the financial statements, as well as where and how. Further, I understand how exactly they are constructed.

I am sure you've heard of the concept of double entry accounting. Each entry must have an opposite side entry.

Payables is an accounting credit. The debit (other side of the entry) is either an expense (i.e. cost of sales) or an asset (i.e. equipment).

You suggested that payables may be for assets. It is an improbable proposition, because there has not been a corresponding increase in the assets on the balance sheet in that time. It is also unlikely in the future because under asset finance lending - the company would recognize it in the borrowings and not payables. It's the same as if you went and purchased a car with a car loan. Do you think the dealer would transfer car registration into your name (asset) before the car get paid for and just issue you with an invoice (payables)?!

Payables clearly relate to expenses. Do you think they are holding off paying CEO, CFO, admin wages, rent?? No. Then it's in the cost of sales. Do you think they are holding off paying miners, plant operators? No. Then it's freight which is single vendor Aurizon.

You said: "Inventories have already been mined so the costs have already been incurred and are valued at the lower of cost and net realisable value (including sale costs). That is building up inventories in start up reduces the cash flow. The level of inventories will influence cash flow in the quarterlies. Stabilising inventories would improve the quarterly cash flow compared with recent quarters when rising inventories will have reduced cash flow (costs are included in the quarterlies, but the revenue not yet received."

How is that different to what I said. They can reduce production and clear the inventory to save on costs. However, to keep to Stage 1.5 they need to continue to ramp up. Inventory

You said: "It is wrong to suggest the ONLY ways to preserve cash flow is to stop production and run down inventories, do something illegal, or increase payables.There are plenty of other options. Some of the payables may be for assets and be paid from loans. They can move into operating surplus. They could increase cash flow by continuing production, but with stable or lower inventories (which will bounce around at any point in time)."

Questions for you in respect of the above:
1. Didn't they mislead the market as to production in December 2022 and January 2023 ahead of cap raise in February 2023? Wasn't production stopped at the time because they were cash strapped? Didn't they lie about it?
2. Isn't misleading market illegal?
3. Didn't they mislead the market as to Aurizon contract for more than 12 months and dropped a $4mln bomb on 7 June 2023?
4. How exactly does a company increase cash flow by continuing production, but with stable or lower inventories? In circumstances where stable production is operating cash negative, and to increase production you need cash....