Its good to have confirmation of the sub-project payback....

Its good to have confirmation of the sub-project payback. Modular DMS unit has a 3.9mth payback. The main DMS payback as a standalone has also been confirmed as a 9 month payback (11.30-12min mark). This means that four months after the modular DMS installation, the effective capital cost is down to $170m (because the $15m for the modular DMS has already been paid back). Before factoring in the post payback returns are likely to be better than the commissioning period returns if the modular DMS has a 3.9mth payback on US$15m its making $3.85m/mth net of all cash costs. If run for 9 months this is circa $35m of net revenues and more if post commissioning cashflows are better than commissioning period cashflows.

With an expected $35m modular unit net revenues, the main capex cost needing funding at the project level is effectively at $150m (but with risk if Spod prices are lower than expected). The project level has $70m from Piedmont and unless spent on exploration $27.9m at the project level further reduces the gap to circa US$50m (Atlantic's 47% = US$23.5m). Atlantic corporate has running costs but had A$15.4m at the last quarter and got US$5m more from MIIF so before funding contingencies/working capital their gap is getting small.

Atlantic have noted they are exploring if potential exists to start the modular DMS earlier so this $35m of net revenue pre main DMS commissioning may increase.

Atlantic have noted the Modular DMS training merits which will hopefully assist commissioning speeds for the main DMS making it closer to a brownfields expansion than a new greenfields project.

While it hasn't been mentioned by Atlantic, the modular DMS has another large benefit and that relates to working capital. Both Core and SYA have done capital raises after the commencement of commissioning as working capital gets tight or is tight on down-side scenarios. The Modular DMS means the project has the option of a US$4m/mth revenue stream during commissioning. This limits the working capital requirements. If there are delays in the main project, the modular is run for a longer period. While not as efficient as the main DMS but massively better than no revenue and a heap of costs.

An 8 September conference and they are still expecting the ML approval this quarter. Only two more weeks remain in the quarter so it must be in the advanced stages to have that confidence. Its subject to government and governments have delays so IMO that still means late Sept / Early Oct.