Sigh, if you have nothing nice to say then say nothing at is the...

Sigh, if you have nothing nice to say then say nothing at is the proverb... but this is HC not your friends facebook page, so someone has to tell it how it is. How about an Analogy...

Your friend has been hit by a truck, is in an induced coma in ICU with swelling on the brain, multiple breaks and internal organ damage. A very sad and bad state of affairs to be sure, much like STA was at the end of Jan when they were on the brink of administration and produced only 8.5kt HMC for the month. Two months later your friend is awake and talking, which is fantastically positive, he might survive after all much like Coburn.

Your friend was employed as a roof carpenter, but will he make it back to full fitness and the ability to work as a roof carpenter again? Maybe not, maybe he only makes it back to teaching carpentry at TAFE for half the wage, and this bank will have to sell his house from under him because it was bought with a massive mortgage that a TAFE teacher simply cannot service. Your friend's slow recovery from near death to chance of survival is great news for him and his family, not necessarily for his bank...STA shareholders are in a worse boat than the bank. STA is not our friend but an investment and we rank behind STA's creditors.

So STA is making 15.5kt/mth HMC, great they may survive, but that is still only ~80% of nameplate assuming 83.5% HM recovery (2019 DFS) and bit less than 95% HM in HMC. I still can't see them making much cash sitting out east and spending not $1 more than they have to buying time to demonstrate they are worth being run as a going concern (ie a business that can make positive cashflow from a debt free situation).


They are still so far away still from recovery in generating a sufficiently high production and positive cashflow after rehab, sustaining capex, mine moves etc to justify some investor tipping in the recap investment required, which ultimately requires the MSP back in action because HMC probably won;t do it (although the MSP could be written off by a new owner and Coburn just stays with a lower cost HMC model). The only end game that matters for shareholders is that Coburn makes a complete ~100% nameplate recovery that justifies a new full market CR recapitalisation... because a partial recovery that cannot cover the high and growing debt burden will see a new owner take over, shareholders wiped out with some form a debt restructure/haircut through Administration.

Well done team for hitting 15.5k HMC and 80% nameplate production for 1.5 months and new employees showing the confidence to sign on. Wonder how the first 9 days of April are going, curious because in the March Update they told us first 11 days produced 5,820t HMC?

GLTAH