Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-7

The situation at KMS is starting to look a little desperate now, yet another quarter of negative cash flows despite Yansteel's US$22m prepayment and Dec 24 interest payments being rescheduled to Jan 25.

The mining rate is just holding up but the Rougher Head Feed is still only 75% of BFS forecast, which means that there has been no headway in addressing the oversize issue (BTW, chapeau to @2ic for raising his concerns with this issue early on, despite the many SFX boosters saying he was just bedwetting and downramping). Fortunately the RHF grade continues to improve and the recoveries are still above design spec. partially offsetting the reduced feed tons , but still a net negative compared to BFS forecasts.

C1 costs are a real concern, still well above the the average realised $A sales price, C1 $A273/t produced v. $A254/dmt received., with no relief apparent from the Business Improvement Initiative with a C1 forecast range of A$270-$300/t produced in the March 25 quarter. ASIC must be pretty ugly...Drill and blast of overburden commenced in Jan 25 so it will be interesting to see how that effects production costs.

At least the MarchQ25 outlook looks better with forecast shipments of 40-60kt zircon conc. at similar pricing to last Q this should bring in around US$27m, and Ilmenite conc. shipments of 160-180kt to Yansteel would be valued at about US$21m, but they will need to offset the Yansteel US$22m prepayment over 2 Q's, so they will probably receive around $US10m this quarter. All up around US$38m sales against forecast of A$270 - $300/t C1 x 212.5kt produced gives us $A60.5m, or at A$1-US.63c, US$38m...so lineball to cover production C1 cash costs.

Then factor in corporate and deferred interest payments and it's going to be another challenging quarter unless they can pull a rabbit out of the hat with the Business Improvement Initiative...we live in hope!

DYOR & GLTAH