When the 1st shipment was announced, 3 Jan, this was highlighted "Production ramp up at Mt Cattlin progressing well, daily plant utilisation is now averaging 72% and increasing, with recoveries now at 60%"
I believe it is common knowledge that the 160k target for 2017 was based on 50% recovery. This is again stated obvious in the 6 February investor presentation. If at the start of Jan, we were at 60% recovery, this can achieve about 192k (160k/0.5X0.6) If the max that can be achieved is 70% and we'd hit this, 160/0.5X0.7=224k.
Of course the above is also dependent on plant utilisation. However, it appears that AT has provided a conservative guidance and therefore we can expect Gxy would overachieve -could be a catalyst for a tripling in SP instead of SP doubling in 2017. It just puts less pressure on mgt to be conservative considering that even at 160k, the cash flow generated is still phenomenal, not to mention the benefits from unused tax losses. Note there is also a further revenue upside from tantalite, a source of tantalum whose main use today is in tantalum capacitors in electronic equipment such as mobile phones, DVD players, video game systems and computers. Tantalite prices seem to be in the vicinity of USD120/kg.
Here's an excerpt from 6 Feb presentation.
Improved flow sheet design and upgraded process equipment driving substantial efficiency gains and higher product quality ― Expanded throughput capacity of 1.6Mtpa ― Low mica content (<5% of total concentrate mass) ― Targeting initial 50%+ recovery Significant expected cash flows to Galaxy from Mt Cattlin with initial offtake prepayments (US$13.5m) received ― Maiden shipment completed in January 2017 ― 2017 production guidance c. 160kt spodumene ― High margin operation with current operating costs ― Cash flows will be utilising A$214m in unused tax losses ― Further revenue upside from tantalite production
Mgt has said MC cashflow has now de risked development of sdv and JB.
AIMO (I've load up my cart with much chemicals, so don't believe everything)
