another point in the cashflow chart:it seems merger cost has not...

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Xjquan

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26/07/19

18:55

Post #: 39715960
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Originally posted by Xjquan: ↑

Some comments on the cash flow chart.

Operating loss is 22M, but that has to be balanced against the inventory of 32kt, which equals about 32M of value. However, at the beginning of the quarter, inventory is 17M, so in total inventory increased by 32-17 15M. 15M-22M = -7M, which means even if the mine is able monetize all the inventory at AUD1000/ton, theres still an operational loss of 7M.

Then there’s other costs as well, interest is about 2M per quarter, royalty about 2M per quarter. Admin cost about 1-3M per quarter. These are pretty rigid and will not change much no matter what are the plant development
plans.
Net loss is thus about 12-14M per quarter, even if all products are sold.

If we add in drilling cost and development cost for the fines, then that would mean an additional 8-10M cost, which I think currently is pretty much on hold.

That explains the tight financial situation despite a CR raising 30M.
The mine is loosing money at the current spodumene prices, combined with delay in shipment, this is indeed very grim in the short term.
Cost of production needs to come down, however without a fines circuit and increased plant throughput, this is difficult to achieve.

The AUD $774/ton cash cost is pretty deceiving and is derived after much accounting tweaks. It is not a good reflection of the actual cost of production. Total production cost is 35,672000, if you divide this by total production 38717, the result is AUD $924/ton. This has not included royalties/interest/admin cost. Tatanum credit may offset the cost a bit, but not by a lot.

Tough ride ahead.

Expand

another point in the cashflow chart:
it seems merger cost has not been paid fully yet.

every quarter expect about 3M-6M of outflow by merger cost, however actual cashflow chart does not seem to have that high number, and the merger cost will be reprojected to next quarter.

Seems the company has been delaying merger cost quarter by quarter, at least part of it.

A40 Price at posting: 8.8¢ Sentiment: None Disclosure: Held
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another point in the cashflow chart:it seems merger cost has not...

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Microcap Wrap: 5 explorers with news out today

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