I can't help seeing that Shs of AHQ have been forced to hang their heads in shame and have hence sold out recently in what rout it has become. The evidence is limited at the moment albeit the ASX query on the last quarterly where AHQ response was that "no fundamental or fatal flaws had been identified or exposed in the operating environment" though advised target production rates will be unlikely met. Also they actually think they have "demonstrated growing and satisfactory operating performance from a start-up situation " (see ASX query 2.C.viii)
I'm not sure a 2 mine start-up was the best and my reservations will be confirmed the more AHQ are delayed in success. I stated before that accidents like barges sinking, dock cranes failing and a train cancellation are material when a shortfall in funds are linked and all need to be Announced to the market.
In regards to the share price the principal reason given was "attributable to the decision by the board to commence the strategic review", (ASX query 2.f), and not the Tranche 2 delay.
On funding, and this is amazing, Tranche 2 and Regal's funding were not considered as material. Just a different source of funds and priced at 43c. But we all know what has happened since? We have received Tranche 2 as well with its Ann on the 17th Aug. So are we ahead???
I do not see why AHQ's price collapsed on the early release of June's qtrly report, though basket case it became. So this makes me wonder where to from here. AHQ claims it has warrant to continued with ASX and 6.a.(i to iv) says still have cash to come in. IMO it should also be able to sell its coal with higher prices as production increases. And I do note production is increasing though not at targets.
Now Today, we have an off-take Marco agreement but not a Marco loan. The first helps our cash position the 2nd restricts capital expenditure. But replacing funds with another source is not the major problem with the sp, since not having manpower at the 2nd mine limited production. Yes we could get better equipment with the funds but lease agreement failed last minute. Also, "March qtrly report based on the fact that production growth had been achieved" was reversed in Jun qtrly (see ASX query 9.2 and labour shortages (9.2 a - d)).
So does anyone acknowledge what the questions should be: Does this company warrant listing? Should the price have collapsed? What true expectations remain?
Maybe it is me but I cannot see much negative at all. SHhs have been diluted but if Regal's dumping of its 10c shares (continuing the rout) has a silver lining we are also able to buy more at similar prices. Coal price expected by GS to stay high, +100% over next TWO YEARS. Production improving but unknown get of equipment.
Free free to respond and give me your best shot (don't pull your punches - as sp says it all)
AHQ Price at posting:
8.8¢ Sentiment: Buy Disclosure: Held
