I suspect that since the company is selling it's assets to Minmetals debt free, it still may have financial obligations outstanding for assets that are a part of the sale. For example, royalties / tax owed to the Lao government for Sepon?
I would also expect there to be additional expenditure required at Prominent Hill to get it working reliably and cashflow positive. It is never as simple as switching a plant of that size on and watching it work troublefree. The company has said the plant has been commissioned, but who's to say they haven't encountered problems since? I would expect that debottlenecking would take a while and it's anybody's guess how many dollars it will take.
Also, given the company's experience with finance nightmares I think it's safe to assume that they will want plenty of cash up their sleeve as contingency in case anything unforseen happens. I think they will be very conservative with their cashflow, at least until PH is cashflow positive and proven a reliable operation.
All, in my opinion.
Cheers,
Kopchai
OZL Price at posting:
$7.00 Sentiment: Hold Disclosure: Held
