A very thorough and concise report.
Personally I find ADN’s approach to a staged construction/production, an absolute master stroke.
In a time of huge supply constraints, high inflation, continued interest rate rises, tighter lending criteria, increasing cost of materials, plus work force shortages, this plan to start small and then expand is something all long term holders should be applauding. This a fantastic board decision to get to production in the most cost effective way that leads to revenues coming through the door as soon as possible. This is literally their job as your BOD.
The other alternative is to try and raise 100 million dollars now, build a 300ktpa facility, then run it at 30% capacity while choking on the high interest rate repayments with a forever diluted share register.
Who here would advise a young newly wed couple who are looking to buy their first home in this inflated and costly market, to go all out and purchase a huge five bedroom house, with a cubby house and swimming pool, simply because they intend to have kids one day….I’d argue that wiser heads would say: “Start small, keep your costs manageable and either extend on the home you have or upgrade to a larger place when the need arises in the future…. “
I really can’t fathom why people are clinging to the idea that the 100ktpa/50ktpa initial production figures are the entire production figures. It’s clearly stated multiple times that this is based solely on the current off-takes, which pertains to the initial ramp up phase leading to the 300k production target as per the DFS…..once again, start small using what we have and expand as and when demand rises….
It’s also fair to note that the 300k DFS target is only for stage 1. Stages 2,3,4 etc will then be funded from profit derived from Stage 1. So no more share dilution once in production for us loyal holders.
IMO, the move to a BOA for the HRM (and dare I say it, in the not too distance future) will be massive. Like the current plan, I fully expect this to also be delivered in a staged approach, however it could grow quickly as ADN’s reputation grows, and customers become more confident with our products. IMCD is a global distributor (the largest) and there’s every possibility that our products will be class leading for many applications.
All these initial off-take partners we presently have will most likely increase their orders year on year as the quality of the products being produced is further proven in these markets. IMO, what we have presently as BOA’s is just the tip of the spear.
I’m expecting several more BOA’s prior to the PEPR approval, including a HRM off-take.
Then, almost like magic, and as we lead up to breaking ground for construction, you will see new announcements pertaining to output increases closer to the DFS…. As planned.
Regarding renumeration, congrats to our BOD for taking your concerns on board. Renumeration levels are still on the light end when compared to many ASX listed companies, including those that do nothing but pivot from one hot prospect to the next as a disguise to fund their lifestyles. Ive seen some companies take years to perform one drill campaign and then another to release the results. And there’s no way in hell they would divulge their income levels in the detail our BOD just have. If you can’t see this as confirmation that we have an unusually honest and stellar cast at the helm then perhaps investing isn’t for you….
Uniquely, what we DO, have on our board, are industry leaders that have seized the opportunity of a lifetime to develop a company that will become a world leader in all things Kaolin Halloysite. And once we receive that PEPR, its no longer a matter of ‘if’…
Literally all we need to do as shareholders right now is show a little patience as our BOD move through the necessary stages to realize the full and massive potential ADN presents us.
Try and enjoy the ride, you may look back on these times and feel proud you stuck around.
Expand
(20min delay)