BCB (ASX) Ann: Quarterly Activities/Appendix 5B Cash Flow Report

Originally posted by mondyinvest: ↑

Had a bit more time to go through the report, found it useful to compare this quarter with prior.

Prior quarter ending 30 June
Payments for development 1.2(b) were ($22.0M). These were “pre-production costs in relation to mine development costs incurred up to and including the point of steady-state or mine design levels of production”. These pre-production costs were split at as follows:
Bluff ($14.4M) for mining, haulage, processing and transport costs
Broadmeadow East ($4.4M) for mobilizing of contractors, and
Burton ($3.3M) for mine planning, early works and re-commissioning costs
No payments for production 1.2(c)
There were net cash inflows from con. note and borrowings of $57.3M ($40.0M from the con. note and $20.1M from Taurus).
Closing position was $140.4M funding available, of 5.9 quarters at that present burn rate of ($23.7M)

Past quarter ending 30 September
Payments for development 1.2(b) were ($6.6M). These costs were all relating to Burton, ($1.5M) security bond for acquisition and ($4.1M) for mine development, re-commissioning costs, legal and consulting fees for Fitzroy port and rail arrangements.
Payments for production 1.2(c) were ($61.0M) for production at Bluff and Broadmeadow East. No further split provided but more detail below (my assumption is that much of this comes from Bluff).
Payments for investing activities totaling ($30.7M) relate to expenditure on the Burton CHPP and camp, and the large chunk is acquisition costs, plus some pre-payment for the rail loop reconstruction.
There were net cash inflows of $23.2M from borrowings (this was the Taurus facility, US$25M remains available but subject to conditions precedent).

General comments
As @hilly_sandman notes, first two shipments from Bluff were captured in this quarter, his figures 80kT x US$263ish / 0.68 = A$31M
Just an aside, I get slightly lower figure, 75kT:
First shipment of 35,000T ULVPCI announced 4 July 2022
Second shipment of 40,000T ULVPCI announced 30 August 2022
Production costs looked a bit worrying verses receipts but only two shipments captured so far, and production costs are for the Bluff and BME and per my notes further below significant investment has been put into Bluff to mitigate future weather issues.
In terms of ROM production timelines:
In the early July announcement Bowen said Bluff should be doing ROM target 80kT to 100kT per month “by the end of next month” (September)
In the late August announcement Bowen said BME had “gained momentum with more than 100,000 tones of ROM coal mined to date”. The same announcement noted Bluff mine had an additional 400t excavator but that ROM coal target of 80kT to 100kT would be “early in the next quarter” due to “unseasonal wet weather (…) and COVID impacts on the mining and haulage workforce”.
In this September quarter update, ROM stockpiles “range between 70kT and 100kT combined at BME and Carborough Downs (…) close to 25kT of final product was on stockpile at the end of the quarter”.
They are producing a bypass coal from BME to be placed into the thermal market to maximise revenues
As @bigchops says, that Cape size vessel of 140kT from BME is going to be a big help, all being well.
Bluff steady-state ramp up is going slower than expected due to weather, labour shortages. Sounds like the pit area was flooded at some point. No figures given for current ROM or final product figures, but third vessel (presumably 40kT again) due for shipping end of this month. Steady state production now to be later this quarter (December).
Most importantly (IMV) I assume a large chunk of the ($61.0M) production costs were generated from Bluff given it is the key producing asset right now, and the comments around considerable investment to re-shape the pit for steady-state terrace mining, as well as the water storage pits. Notably they refer to “effectively pre-stripping areas which will be mined at a later stage”. They also note that in October, ULVPCI is trading at US$282/T which thanks to the collapsing ‘Pacific Peso’ is at today’s ROE an impressive A$454/T. They also now have three excavators working.

So all in all, whilst I was concerned about the high production costs, I think this probably checks out and has been explained well enough in the notes for me. Happy to hear views from others to see if we’re on the same page, or if I should be more concerned about cash position.

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@mondyinvest it take a significant time and effort to get to the level of understanding you have. Appreciate you summarising on HC, thanks!

While the thermal market (API-5) is somewhat collapsing (NEWC strong, for now), the ULVPCI market is staying very bouyant, and I believe this is because a large amount of seaborne PCI comes out of Russia...

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@mondyinvest it take a significant time and effort to get to the...

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