Ann: Operational and Corporate Activities Update, page-80

The most likely scenario is that the funds raised for the expansion were used to negotiate the new financing package / relaxation of finance terms and are therefore, as you say, earmarked for the expansion.

At the time the finance was renegotiated it was apparent the cost assumptions were set too low and would have required additional economies of scale to meet the cash flow forecasts the financiers were comfortable with. It is hard to imagine why else they would push ahead with the expansion so soon without being required to do so. I can't say I've ever seen a greenfield operation push ahead with an expansion before commissioning is complete and construction risk out of the way.

The same financiers provided a 6 month?? Working capital facility of a$20m, I suspect this was an audit requirement to meet the definition of going concern. The facility includes a 6month option to extend at the discretion of the financiers but what is that really worth.

If they are now effectively pushing back ramp up to 80ktpa by 1 year (previously 90ktpa) it is hard to see how they will fund working capital without a meaningful capital injection. The announcement is carefully worded and everything seems conditional on sufficient working capital funding being made available.

In any case, and as stated in the announcement, this will trigger the material adverse change clause in the loan docs and a review by the financiers. The most likely outcome will be a demand for another capital raise to fund the additional costs incurred during ramp up and provide the necessary working capital funding.

There are alternatives, including a potential prepayment by the offtaker, but that requires them to take on an unsecured financing position with the technical and delivery risk.

One would hope that learnings to date are sufficient to convince those with deeper pockets that this can get over the line.

Somewhat more positive is the pricing dynamic at play, that may give financiers some comfort but again it all comes down to execution/technical risk and their willingness to take that on time and time again. As positive as the market pricing is, it is worthless if you are not producing.

Aimo, I follow the sector our of interest and hope this turned the corner for both shareholder and the broader industry