There seems to be a good mix of opinions about this...

There seems to be a good mix of opinions about this announcement.

I don’t think it’s bad but it does seem to point toward delays. To avoid mud slinging I will explain myself and how I tried to peel back the onion layers of this announcement.

It seems to me that shareholders are being asked to accept the following;

Main heading
Management wants shareholders to know that nothing material has changed… erm… to their internal assumptions… repeating well publicized production targets and financial “forecasts” (i.e. inputs). The announcement is carefully worded to avoid any comments on current progress on feasibility (aka updates) even thiugh the news is titled as an update. Ok. At least historic inputs are holding firm. Sounds good.

Main Body
This part seems to weave together two stories - one story about overall P1 economics and another about incomplete or ongoing tasks. The results of the incomplete tasks would be expected to impact the overall P1 economics. This gets a bit circular because mgmt just said their assumptions of “financial forecasts” have not changed? Ok. Starting to raise a few questions but let’s plough on.

A re-reading doesn’t clear things up. Instead I find little details (carefully dropped in between the two stories contained in the body of the announcement) that imply the opposite of the headline claim.

For example, management says proudly that its internal assumptions about “inputs” haven’t changed (as per heading), but the storylines link more drilling with P1 ecomonics?

The announcement clearly says the exploration drilling task is only to “test” for “potential” extensions at Helikon 4… and then followed by a “comprehensive” review of project economics? Ok. That’s new. Reading on…

… but good news for shareholders… extra ore reserves (14%) are yet to be added to the P1 DFS (this percent increase is lower than the typical +/- 15% accuracy limits for a DFS, and also no mention is made of the associated effects of cost increases)… ok … perhaps marginally positive … but on its own it doesn’t seem significant enough to warrant a “comprehensive” review… must be some other driver … but let’s plough on…

While we cannot know for sure why the envisaged review is dependent on the (as yet unknown) outcomes of Helikon 4 exploration drilling we can certainly know that perhaps a 6month period of time will elapse before P1 economics can be “reviewed”.

Then, going back over past announcements, if the outcomes of Helikon drilling are poor then why is there a need to wait to complete a “comprehensive” review of project economics? The economics won’t change because of poor drilling results. Alternatively, if the drill results are awesome then haven’t we all been groomed over several cap raises to believe the funds contributed to pay for this extension drilling is to support a P2 plant feasibility? and so why would the P1 economics be dependent on this proposed Helikon 4 drill results? So much smoke and mirrors.

Seems to me that while the headline claim might be technical true (as at todays date) the actual details are sayings that upcoming events will change things… and it’s likely to take circa 6months to get there.

This method of communication is a bit too cute for my liking but has all the hallmarks of the style they have employed since 2017… make a big fuss about a minor and tangential opportunity and use it as a Trojan horse to smuggle in unwelcome changes to actual progress on major critical milestones. Otherwise known as bait and switch. Sad really.

Go the slow ‘pus.

AM74