I have to agree with pretty much everything. I do sit on the...

I have to agree with pretty much everything. I do sit on the fence in relation to the bauxite play, i see the potential and the benefits of being more diversified. Just not sure on the timing or should they stick to what they know, coal.

It will be interesting how much they will pay to purchase the mine in the first place (they don't own it - bold move planning and announcing the next 13 months of a mine you don't own). Also where is that money is actually going to come from to purchase it, they only had $10m in cash at 30 June (restricted cash isn't cash despite their assurance).

On top of that, as you mentioned, where is the $100m+ coming from to actually build the mine. They didn't have a strong operating cash flow FY20, just under $4m, sure the South Africa operation may boost that a bit for 2021, but not in the vicinity of $100m in 12 months. Combine with that, they also want to develop Springsure coal mine in Qld.

Looks like either more debt or some sort of capital raising/issue of equity ahead if they go ahead.