Good question @Just_a_guy Obviously SM71 had some down time,...

Good question @Just_a_guy Obviously SM71 had some down time, which impacted volumes but this is part of the business and can't be avoided so that's fine.

As @ProPunter23Red pointed out, admin and corp costs were smashed this quarter. US$1.4m vs US$643k PCP, so they've effectively doubled. I would say an appropriate baseline based off previous 5Bs would be US$500-600k, but this is still WAY too high.

With a A$40m payout, our nice little interest income earner drops out so that will need to be accounted for. That's comping at US$200k per quarter now. An easy save would be to immediately stop exploration and evaluation activities, which are a similar expense - but they probably can't help themselves as the office bodies need to be seen to be doing something so I'm going to keep that expense in my analysis for now.

So while there are a few moving parts like O&G prices, downtime, declines etc, from a cost perspective I see an admin cost benefit of US$700k less loss of interest income of US$200k, so a net benefit of US$500k business as usual from operating activities. Also, we can add back line fee savings of US$100k per quarter as the Macquarie line has been cancelled.

Overall, my expectation would be net cashflow of US$1-2m per quarter noting the standard moving parts that will likely impact this number. If I take the median of that at US$1.5m that comes to around A$9.4m p.a. using US0.64.

Present cash in AUD is $50.5m plus the Dec quarter gets me to around $53m pre payout.

Post payout, the theoretical market cap drops to $43m, which includes the ~$13m in cash left. If my rough estimates of annual FCF of $9.4m are right then by Dec 2024 half the market cap is in cash ($13m + $9.4m). Add in a valuation lens and the business will have an EV/EBITDA or EBITDAX of <1x and that prescribes no value to the PANR royalty.

So to cut to the chase, the business looks compellingly cheap at 1.8c cum cap-return. There's also the high probability of asset sales, which even at 1x would be accretive to holders. Plus, as cynical as holders are, there has to be a small probability that they could just sweat the assets and really strip back the costs. In that scenario the business could be fully cash backed by Dec 2024.

Interested in other views if anyone has any