Hey Wassa, my first thought was... I don't think Wayne is spending too much time thinking about you Jokes aside, without a doubt the overhang from the accounts payable is a drag on the very near term, but.... it has been a very heavy capex period, and the spend has been high, so... couple that with the T/O of Karora which required heavy cash payments as I discussed above, and WGX has been using it's balance sheet in every way possible to minimize the use of direct debt (note they did draw down $50m recently), my guess that is partially to pay down some of the trade receivables. The upcoming quarter will still not be a great one in terms of FCF as... they are still spending heavily, though hopefully this quarter is the tipping point, hence my bullishness on the stock, as I am looking past what had to be done to acquire Beta Hunt (I believe it was a bargain at $1.1 Billion), I also will say that the Murchison is unlikely to have a great quarter, at least in regards to Bluebird, as it's still ramping up the U/G. Fortnum will hopefully have a great quarter, Tuckabianna... eh... it will hopefully be ok. The real growth I believe will be from Beta Hunt. Two Boy's also sounds like it's already doing better (a small U/G mine, but... it all helps).
Wayne has hinted that Beta, now fully staffed, is moving more ore than under Karora, plus... some high grade ore was not able to be mined in the Sept Q. For comparrison, I almost view Beta as being as good as Gwalia... yet GMD is valued at more than WGX... I suppose I view the Murchison assets as being almost a free option...
As the graph shows, the Murchison has underperformed, but... a large part of that is having closed Paddy Flat. It is what it is.
I don't think the MD should stop talking, but... I do agree that WGX needs to start getting runs on the board, but again... only been 4 months since they acquired Karora, that is a short time... Huge increase in staff, etc.
Will be interesting to see if WGX provides an production update early in the new year.
WGX Price at posting:
$2.89 Sentiment: Hold Disclosure: Held
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