First is that without the adverse movement in fair value of financial assets profit would be much larger. The financial assets are a convertible note and options with Cyprium Metals (CYM). The convertible is $36m face value w/ option to convert at 35.5c (March 25), the options have strike prices of 31.4c for the March 22's and 35.5c for the March 23's.
Now because the share price of CYM shifted from around 28c at 30 June to 16c at 31 December - the value of these financial assets have come off, it's all non cash of course.... and you can see cash flow from ops ($59m) matches Gross Profit (and will continue to as the company sits on a stack of tax losses).
The other piece to note is the receivables build - some $22m to collect. With this and inventories the working cap it quite large and bodes well for future cash gen. This thing is going to spew cash this coming year, especially in the second half as the heavy capex at Area 5 comes to an end.
MLX Price at posting:
54.5¢ Sentiment: Buy Disclosure: Held
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