General Discussion Topics, page-120147

Hello all,

So much trepidation and agitation on this site. Why don't we all catch our breath and THINK about it for a minute.

Assuming that we’re delivering SC5.35 (rather than SC6), as stated in the 5 September announcement, and assuming an average market price of $2,800 (USD) per dmt, to be conservative, we should anticipate that every dmt delivered to “the market” will result in $2,500 (all numbers herein are USD unless otherwise stated) revenue and every dmt delivered to PLL will result in $800 USD. I’ve rounded from $2,492 and $802, for accuracy’s sake, and I know the 5 September statement said we’re producing SC5.5, but we shipped SC5.35, and I want to stay conservative.

We know that 90% of the payment for the 19,200 dmt cargo taking the slow boat to China was received and is included in the 31 August cash balance, so that’s revenue under the bridge. In September, we are allegedly not receiving any payments, so I anticipate that we will show revenues of approximately $43.2M, and probably be close to breakeven. Maybe we show a slight profit, maybe we show a slight loss.

Here are some educated guesses about what Q2 will have in store for us:

1. We MUST assume is that PLL is finally going to pay us for the first shipment of spud. Given an almost 94% conversion rate from wmt to dmt, that first shipment should be approximately 14,050 dmt at $800, yielding $11.24M.

2. We’re owed the final 10% payment on the PLL Moon’s cargo, or approximately $4.8M

3. There was already 30,000 wmt of spud at port on 5 September, from which the PLL offtake shipment was taken, leaving 15,000 wmt at port plus whatever we produced in September. One would hope that whatever we produce in October and November will be shipped and paid for by 31 December.

4. According to the latest presentation (last month at the BMO Mining Conference), we anticipate shipping 60,000 dmt of spud this quarter (FY 2024 Q2).

a. Assuming that 30,000 dmt of that goes to PLL at an average of $800 per dmt, that represents $24M of Q2 revenue.

b. Assuming that the other 30,000 dmt is sold to “the market” at an average price of $2,500 per dmt, that represents another $75M of revenue.

Assuming that we do not ship more than what I have listed, and we HAVE been ahead of schedule on the production end, I would anticipate Q2 revenue of $115M. Our AISC (according to the BMO presentation, just last month) is $740/t. We’re supposed to produce 60,000 dmt in Q2, so all-in cost should be in the neighborhood of $44.4M, yielding a profit of APPROXIMATELY $70M. SYA owns 75% of that, so we should see a Q2 profit of $52.5M, less whatever we spend advancing our WA projects and Moblan.

That means we should be profitable in Q2, but to the tune of less than one cent per share. Of course, we got through August and September with the average SC6 market price at a bit above $3,000 per dmt, so our numbers should be a little better, but as I stated, I want to remain conservative, and be pleasantly surprised.

Bottom line, we’re still ramping-up and if not this quarter, by Q2, we should actually be profitable. As I have said for months, we should assume that any profits over the next two years will be taken-up by CAPEX, but if we’re pulling-in $50M per quarter (at least), and with PLL absorbing 25% of the NAL CAPEX, we’re actually in an excellent position. That's also before addressing the well over $200M in the bank. The trick is to understand that we’re probably two years and a decent CEO away from generating the sort of free cash flow that will allow us to start thinking more like PLS and less like CXO.

In the meantime, even this BOD isn’t going to put us out of business, and the only real threat to our long term outlook is that they might drive our SP down to the point that we become the object of unwanted buyout attention. Altura never had the sort of revenue that we have, and we’re not burdened with debt the way they were.

As always, just my opinion. DYOR and DYODD (it’s your money).

Best regards, all