Think folks are forgetting the capital spend coming up here..
~$75m into Federation
~$25m into expanding Peak processing facilities
~$40m to open up Great Cobar
And then you have ongoing expenses like care and maintenance costs at Hera and Dargues, corporate cost etc.. all to be funded by the ~$100m cash pile and Peak. This is why the cash pile is there and why the company is engaging in hedging to lock in revenues.
The idea that the bank balance should be drained on peppering holes into the ground, buying up stakes in juniors and returning funds to shareholders seems to miss all of this. The focus needs to be executing the ~$140m of capital projects above, optimising Peak and selling off Dargues imo. If you execute all in the next ~18mths you have 1.1mtpa at probably $150/t margins for 6-8years of defined life. Then you can start pepper holes deeper into Federation out of cash flows and once the decline is established to a depth where you don’t have to drill 500m holes to reach mineralisation.
AMI Price at posting:
17.0¢ Sentiment: Hold Disclosure: Held
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