Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-6

i think i am going to roll the dice and participate on this one (at least in part) and then look at production figures next q and decide what to do. as far as i see it the issues in order of importance are as follows:
1. need to increase production at new elk. This rests on two operational issues, a. staffing, they need 30 staff, and b. equipment issues which is a mix of maintenance staff and electrics in the continuous miners (cause of lower sept prod figures). these are operational issues and i spoke with jon and he seems a solid coal ops guy (whereas mg a lawyer would have been out of his depth on these ops issues)
2. asian buyer offtake at $108 a tonne for 160000t. best case this is renegotiated. second best case we increase production and so can be delivering significant volume into marco contract on top of asian buyer contract. worst case we are still locked in for three q which costs us around 16m. at least the risk is contained and known.
3. the retail raise fails to raise sufficient amounts noting its not underwritten. we then may not have sufficient amounts to get us to self sustaining position next q.
4. roof issues appear to be being addressed and funding for this is of course included as part of the raise. there are comments on the roof on linkedin and note the safety incident in the quarterly.
5. logistics to get the coal 1000km to mobile appear to have been addressed.
6 management, their questionable practices around disclosure and which got us into this position are still around but at least there has been some change at the operational level (jon and others) norm if there are management issues and share sales by the former ceo (when he obviously had info that wasnt disclosed to the market) i would run a mile.

then on the upsides:
1. institutional tranche has closed and they must have done more dd than retail can do.
2. marco loan is a nice to have but not essential if the raise hits target. collins st is not due until 2025 and the remaining 14m is a safety net. i understand delays are just sorting out the intercreditor issues between cline and marco.
3. marco figure at 220 is apparently better than it sounds because it is delivery to the stockpile at mobile, we dont pay port fees and is earlier payment. at least its all we need to get thru the next twelve months.
4. 40m market cap is cheap when we should be producing 700,000 to 1m t a year within a couple of quarters and it needs a solid ops guy to get us there.
5 decent coal pricing should hang around for a little bit more yet.
6. solid operations guy in place as needed to get the 30 people in place and all shifts filled.

so i think i will participate for part and then have another look in one q to see whether production has turned around and decide whether to.get out then.