Ann: Construction Contractor Appointed, Budgetary Forecast Update, page-19

I agree that there is a market overreaction but with investors being let down by management in the past, it doesn’t surprise me.

the devil lies in the detail here. It should not be taken as a $5m overrun but rather a $20m overrun. The $5m net overrun is clawed back by the company increasing their internal modelling for the spot price, which as we all know, can change very quickly. The real overrun which has the SP doing what it is doing is the $20m, which is a lot given the project economics were redone <12 months ago and in construction inflation hasn’t run that hard since then. My guess is their internal modelling missed a few line items or had their assumptions wrong which is why they came out with this updated figure. The other aspect when you read the detail is that they have assumed overtime to hit the production timeline, I would say they have had to pay more because their initial timeline was a bit ambitious and they are trying to ensure they don’t let investors down again by delaying production until 2025.

Good to see the company reiterate guidance on commencing construction though, albeit I think there is risk in this getting delayed later on as I think it will be pretty tight.

still positive on the overall story in the run up to production though.