They are one of the few small-cap ASX-listed copper producers...

They are one of the few small-cap ASX-listed copper producers that have a profitable mine. They have recently purchased the surrounding tenements around Eloise and consolidating the copper assets to expand future production. As a result of this, capex expenditure is required for this development, which will increase their production scale, however short term means money will be spent for the mine development

In the last 3 months, their Eloise mine produced $46.4 million in revenue with $16.9 million in positive cash flow. They decided to expand the Eloise mine and spent -$12.2 million to further upgrade the resource via drilling.

Eloise expenditure ~ $12.2m = $2.7m (resource drilling) + $2.4m (equipment upgrades and maintainance) + $5.6m (underground development) + $1.4m (decline deeps development)

So, from the $16.9 million in net cash flow produced at Eloise
$16.9m - $12.2m = $4.7m net cash from the Eloise mine

They then spent $2.0 million on developing Jericho = $4.7 - 2.0 = $2.7m

Which leaves $2.7 million

Exploration expenditure on other resources came out to ~$1.5m - Left over cash is now $2.7m - $1.5m = $1.2m


Corporate + Working Capital movement = +$1.2m - $1.6m - $2.0 = ~ -$2.3m in negative cash flow.

This excluded 177t of copper concentrade that was awaiting sale with a notional value of approx 2.2million.

So including the $2.2million the quarter was basically down ~$0.1 million after investments spent on Eloise and developing Jericho

Hence after that sale, last quarter was basically break even. Meaning from their producing cornerstone Eloise mine alone, they were able to fund their capex to develop Jericho and the surrounding copper assets at breakeven. I think thats a pretty good outcome, meaning that they can fund their development through an already operating mine, rather than a equity raise which would dilute shareholders including themselves. I don't think too many other small-cap producers can lay claim to this.

The next step for them is to develop Jericho, which may require some debt to fund this development to bring their total production to 20ktpa of Copper and 7.5K ozpa of gold.

Now, take a look and see how much Metals Acquisition Limited paid for Glencore's CSA copper mine in NSW which produces 40ktpa of Copper.
~ A$1.67billion (US$1,100 million) + 1.5% copper NSR royalty. Also important to note their cost of production is much cheaper though at US$1.99 per lb compared to AIC at this current moment. However costs should come down once production ramps up from econonomies of scale.




not investment advice, simply sharing my thoughts and research.