Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-31

@2ic I think the suspense is killing everyone and no amount of good but saddening analysis will quell that thirst. Can I add to it:

In hindsight , STA is in this predicament because it arrived at commissioning under funded and no appreciation of commissioning risks which lay ahead. Luke and Flavio had disguised a significant capital blow out long before it was time to commission and had peed against the wall any wiggle room in terms of cash and/or credibility. And then commissioning risks became real : tailings management; MSP failure, WCP performance / stability; DMU performance / stability. All engineering problems presumably capable of resolve, but as of today, seemingly still unresolved. Notably, aside from the water issue, the resource definition has not been flagged as a principal trouble maker. But now, because lenders are driving the agenda, those problems are amplified and the real resolves necessary are set aside. Nonetheless, with this in mind, if the current understanding of the underlying resource is economically consistent with all the previous studies, then I can understand managements current intent. In fact, because they are persisting this must be true and they must be able to see a path forward other than administration. I cannot accept that directors of a public company would continue to operate an insolvent company only so that existing lenders did not lose their shirts ...

In hindsight they needed (and still need) a bigger balance sheet to exploit this resource and given the period of suspensions my sense is that they are actively working their way through a due diligence process to achieve exactly that ...

In the meantime :

the concept that STA might borrow it's way out of this is pretty difficult to swallow. I understand that the existing lenders might see value in looking to work their way out only because the alternative means they'll get nickel and dime (ie cents in the $). Equally, whilst a headline high interest rate might seem attractive to a prospective lender, I can only assume that he/she too would be twitchy about where he was in the pegging order if it all turns to shite ... and aside from NAIF, I can't see anyone giving a newbie a free pass to priority security. I guess the nickel and dime between 2 lenders is at least slightly better than the nickel and dime between 3 lenders.

I think the Tanzanian assets are definite get rid of asset ... I'm watchful of what other players are up to but I think a decent sale price on all these assets might give a little bit of breathing room.

Volumes sold increases isn't much of a solution unless they can improve their margins. A volume increase alone only means they would run out of cash faster. Last look, costs are tracking at about A$1150/tonne HMC, which is more than what the apparent sales price is

Is there MSP capacity available in the region that STA might tap into cost effectively? If so, is the additional product price enough to absorb what is likely to be a heavy tolling cost?

Lastly, how much room is there in the cost structures ... ie how much and how quickly can they get the A$1150 / tonne down? My sense is that there would be a whole lot of demobilising costs to wear (and maybe delay payment of) but is this a path? Of course, volumes need to protected and it would need to be a meaningful number so that the resultant cost $/ HMC t was closer to the prevailing price of HMC ... a big difference !

Is a chunky prepayment maybe under written or secured by a NAIF guarantee conceivable ... a lot of face and economic activity to be saved?

tough gig for sure