I think it is just the new/interim CEO Andrew Graham clearing the decks and casting a critical eye over all the group operations, particularly Hera. As AG only came onboard in March 22 to lead development at Federation he is not encumbered by previous management decisions/commitments, such as expending A$8.5m in growth capital on Hera in the previous quarter.
IMO it's a good move given Hera had been a drag on group cashflows for the previous 2Q's and the FY23 forecasts in the October 22 "Federation Feasibility Study and Company Update" looked pretty ugly, with Hera's costs estimate of A$210/t ore v. A$160/t ore NSR seeing them losing A$50/t of ore mined, I think it is an pretty obvious call for the new management to shutter Hera ASAP! Hopefully it will lead to an overall improvement in group cashflows allowing them to internally fund a restart of the Federation decline without a hail mary capital raise at the currently depressed SP, or leaving AMI open to an opportunistic takeover...
AMI Price at posting:
12.5¢ Sentiment: None Disclosure: Held
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