What current circumstances? Headlines about rate rises and...

What current circumstances? Headlines about rate rises and inflation and war and supply chains? People flippantly talk about the sky falling and ‘recessionary environment’ because they read the AFR and those were the headlines. It’s all fear. How about shipping costs coming down (they are). How about the exchange rate improving our NPV materially (it is). How about the global demand for kaolin and halloysite products increasing (it is) while supply is massively decreasing (it is). How about the latest lockdowns in China being temporary (they always are). How about the market pricing in an extremely hawkish view of the RBA and Fed’s next moves (it is). The Australian economy is not recessionary, that’s utter nonsense.

At the end of the day shareholder return is driven by a very small set of things:
1. Profit - at this stage we have the DFS view, $80M+ annual EBITDA base case. The story is great here, and yes any price sensitive announcements add weight and de-risk, so they should make a difference
2. Debt and equity - maybe there’s further dilution maybe not. We have no debt
3. Industry multiple - this is dictated the market, and moved by FEAR and GREED. This is cyclical. always has been and always will be

Paper losses feel very uncomfortable and create anxiety. The companies where I’ve seen paper losses turn into real losses were missing the fundamentals. The companies with fundamentals always swing back.