Good to see the Glencore arbitration sorted out which allows Federation ore to be treated at Peak (where Trafigura has the offtake) instead of Hera (where Glencore has the offtake). Now we just need the relevant permits to truck 600ktpa up the road and to expand Peak plant.
Also good to see Dargues successfully close. I’m sure a lot of shareholders are happy to see the back of it.
Still a lot of investment here - around $70m getting Federation ramped up this year, a further $20-$25m to expand the Peak mill next fin year and likely $40-$50m to open up Great Cobar next fin year. But it’s becoming much clearer that by bringing in these high grade ore sources and debottlenecking ops to get scale.. margins will explode post this investment. I would hazard a guess that the ~1.2mtpa of ore through Peak once eventually expanded will yield somewhere in the order of $150-$200/t of margin at current prices ($180-$240m pa).
AMI Price at posting:
20.0¢ Sentiment: Hold Disclosure: Held
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