It would be nice to hear an update on the testing and progress of the new plant equipment. Here is a suggestion after a glass or three of pre-dinner drinks.
Yes, it would be nice to know how the tonnage produced and sold is progressing, with comment on whether it is production or sales holding up progress.
From the numbers I've seen WAK should be turning quite a nice profit from operations quickly. At 200,000 tonnes a year and a projected $130 profit per tonne that'll give us around $26m. Sure there are a lot of other costs to come out of that including loans to directors.
I doubt if WAK can make $130 per tonne profit. We have little to work on other than the DFS, and that was written in 2020. The profit before tax may be half that – circa $65, IMO.
A previous post mentioned having to consider another capital raising to fund the balance of stage 2. However, with many of us sitting on 25c options that expire in Nov 23, if WAK declared a 1c dividend - which would cost about $2.8m (282m shares outstanding x 1c) - I would venture a guess that our share price would exceed 25c quite easily - and remain there. A 1c div and a 4% yield gives us a 25c share price. For a growth company we could look at a 3.5% yield giving us a share price of 28.5c. This seems like the best use of $2.8m in my books.
The exercise of those Nov 23 options would give us $32m in the bank. We could easily fund stage two and progress towards 3 and 4. Why go through the expense of another capital raising? The brokers want 10% plus and that winds up costing us more and we'd get less.
A second plant would cost about $15m, and if WAK can make $65 per tonne EBIT, at a capacity of 200,000 tonnes, that is $13m, growing to $15M a year when the second plant is running. With EBIT flowing in at that rate, it would be easy to fund the plant with a mixture of free cash and borrowing, with the borrowing being relatively short-term. On this basis, I would be very much against a CR (read share dilution).
On dividend, that should, IMO wait until both plants are churning out cash, and when WAK has no where to spend it, an paying down borrowings quickly is where cash can be usefully deployed. The market would react to the earnings, and their projection. I do not think a dividend would be a factor that pushed the SP up. It would be a positive for a few, and a negative for many, so on balance paying a dividend too soon, may not push up the SP.
The above is a hurried post, because I have an appointment to go to.
WAK Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
(20min delay)