Ann: Half Yearly Report and Accounts, page-16

their aim is to be a mineral sands producer for the LT. The have a reserve base for 4-5 years and resources that can probably double that. I think with resource companies the key is DCF . In this case cash flow generation is so strong that optionality is significant.
starting in early July they were net cash of approx 2-3 m. They also had approx 72m AUD in inventory on the books . This quarter they will have monetised around 25m of this with October having another order of 20k. The aim is to bring this inventory down to around 50k by Dec. Because they continue to produce more than they are selling even with the extra sales , the inventory draw down will be slower than the extra 20kmthty are selling per month. May take 5- 6 months to get to 50k target. So this half will see not only approx 40m in cash added from inventory ( pure profit as expenses already incurred ) but another 25-30 m from normal sales. They have bought some more land in August so I expect cash circa 25-30m ( probably on the higher end ( depends on when cash is received for current Sept shipment that is currently loading. By Dec csSh circa 55m Free cash flow next year would be circa 60-70 m or about 40-50 m post dividends and expenses
in simple terms terms this is what is in offer for 166m market cap
cash of around 25m -30 m now and 50-55 end of Dec
inventory of 55m end of sept
land of 20m

so for 66m now or 30m in dec , you are buying the mining business for sub one years free cash flow
it goes without saying I bought note at 17 and 17.5 today