Ann: Trading Halt, page-146

@ poseidon ark , you are correct about hedging, it's not as simple as an each way bet at all, and it can be costly. Something I believe is pertinent to the Riley IO situation/story is the length of time IO actually traded over US$140/ton.

IO hit $140 early Dec 2020 by early Sept 2021 IO was falling like a rock and went thru $140 and hasn't been anywhere near since. See chart below.


Unfortunately it's a 5yr chart but the prices and timing are correct, DYOR if in any doubt. So Riley was a 2 year project, but the IO price was only above S140 for 9 mths, so it would have been really nice to catch the window, but there's still a 15 mth shortfall.

Covid has been causing supply chain disruptions since mid 2020, and was also a problem for VMS obtaining equipment needed for the wet screening plant; and nobody could have known the Chinese would cut back on steel production, as well as putting a steep discount on lower grade IO because they suddenly decided that they wanted to reduce their coal consumption.

As a result coal prices went crazy after the Chinese decided to dud Australia on the coal contracts they had on our clean coal, creating supply shortfalls and inflating the cost of any coal that was available.

I know it has been mentioned but previously the 30% price discount (on Fe grade) was also a real kick in the guts from our Chinese friends, and I don't think mngmt had seen that one coming; and then of course there was the sea freight scenario.

What happens with sea freight rates is anybodies guess, because it looks like they want to keep this covid fear campaign going and turn us all into pin cushions. Anyway I live in hope and if conditions are kind we may see Riley make a decent contribution yet.

I'm OK with the CR, and will buy some more, I think the price is unfortunate but it has been market forces as much as the mngmt that has seen price action go where it has. For me Riley was only about contributing to getting Mt Lindsay happening, and mngmt say that is the plan.

It was good to see the remuneration deal get the kibosh, and something I would like to see is the appointment of someone with building mines experience take Hallidays place on the Board. We don't need another accountant or geologist. Over and out.

mc