Hi mate. Good question. I have been highly focussed on these figures myself. The 62% recovery rate came from about 1 meter in front of my face. That was from JB straight from the gob. He then continued to say they are heading towards 67% recovery. Didnt put a timeline on when 67% would be realised. This wasnt part of the AGM discussions captured on the camera. I had a HC poster to the right of me in the same discussion. A young bloke, pretty knowledgable and the bloke said he hadnt been posting much lately coz the negativity was doing his head in. But he was still watching, he will know im talking about him here and hope he is doing good. He was a pretty pleasant guy. Both JB and Dougal were very focussed on explaining the ball mill tangle and the effect it had on ramp up, but emphasising the trajectory which the recovery rate returned to after the 4 day down-period. I just maintained the line (being a production guy myself) that it was all good and these things happen and everyone was comfortable the recovery rate was increasing satisfactorily. Now i havent played back all of the AGM coz i was a little bit embarrassed about wording of my unscripted questions at the end but im pretty sure that JB said that the production costs at the end this quarter wont move TOO much south because the output has reduced from the 226kt rate which would see the optimal cost structure realised. Based on that, i would be happy with anything under $1200AUD/t, particularly while we are still spending money on the ramp up. (domes, etc).
I didnt get a chance to ask about a JV shipment because i was too busy trying to slip in the Tabba Tabba dagger but what i do know is that it dont take a scientist to realise that this year's sales guidance includes non- PLL shipments and i certainly hope that the reduced target is certainly met. Even 1 or 2 SYQ non PLL shipments at these prices would see us pay for NAL interest and possibly bank a little for the refinery. But if we do the numbers i would expect that at least 1 JV shipment will have gone this quarter.
I know that we all curse and swear at the PLL offtake but i refuse to be trapped into that mindset and maintain that is ever so important that our JV partner remains cash positive and continues to pay into the venture, particularly while these prices are tough, because their agreements might be all we need to get us through this period. It dont matter if we only make $15/t or $315/t, as long as we can effectively manage that cash balance through these crap prices, and even then STILL have a $200m debt facility as a back up, then we most certainly get through to better priced times. This is why i was a bit aggrivated by the comment the other day that "the company is in trouble" because it is not the case at all right now. Not mathematically and certainly not Sovereign.
We havent reached nameplate yet, and that is ok because since those claims, we have seen the income fall away and we now have a structured spending plan that is less intensive and much more suited to todays cash flows and that is all well and good for the current economic environment and our bank balance. I'm sure Dougal would be well onto this. And i got so much more faith in him after meeting him. Dougal could get snapped up along with Silvain for a very good price from other interested parties so those guys remain top of my pay rise Christmas list. It should be comforting knowing they are here and seemingly for the long haul.
Mate if we see $1100 to $1150AUD/t ASIC i would be effing stoked because NAL will be self sustaining. Just, but it is all that matters.
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