Less Ore mined Jun vs Mar Qtr is the proof things have not got better but worse... that is quite a different story from all the "progressing", "advancing" "some issues" etc. Clearly they spent a Qtr going backwards with DMU and other equipment problems when after the Mar Qtr in May 5th Morgans expected continued improvements might even see MSP final product shipped with ongoing ramp-up towards nameplate WCP.
There was enough evidence in the monthly shipment volumes we could tell there was a fair amount of BS in company guidance. Coinciding with the share price selling off all Qtr and accelerating in June when it must have been obvious all the strategies to fix equipment availability wasn't working. Anyone buying was playing with some sort of fire and has to take some blame, things were not great. No way the market could tell they were that bad though, and not so bad it's another 6 months slippage expected to rectify.
It's the $20M on capex beyond what was guided by any reasonable read of the Mar Qtrly that is the killer. On operating costs they almost broke even on two shipments, if the third went late June instead of ealry July, revenue would have been well positive to opex on a C1 basis. That unexpected $20M brought the cash-crunch, would have been obvious to management mid-June regardless of last shipment timing because by then production wasn't riding to the rescue.
Looking back at that large volume sell-off around 20th june looks about the time penny dropped for the BOD that liquidity headroom wasn;t going to make it with a 6 month slippage to rectify stalled production ramp-up... June 20th was actually an up day for ILU and the Resource Index, so no excuses there.
STA Price at posting:
22.0¢ Sentiment: None Disclosure: Held
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