I have to confess to being somewhat surprised at the trading...

I have to confess to being somewhat surprised at the trading after this announcement. The raise isn't a good look so close to the quarterly, and despite agreeing with the bigger picture of what SS might mean for debt and stage 2, that is all conjecture as far as the market is concerned. The 'easy' interpretation is this is a cash injection to cover OPEX and that we're still struggling to prove cashflow positivity sufficient to tick along. I would love to see and still hope that the quarterly is a good one with improving costs per projections, and guidance giving very solid outlook for the next quarter, but again the assumption will be that things are still very tight.

If costs come in at $400/tonne (AUD) as projected and we achieve $550 USD/tonne sales floor price ($783 AUD/tonne), that's a margin of $383 on about 38,600 tonnes sold, for approx $14,750,000 (AUD) profit. Add that to the $17 million cash held, and the $22.4 million from this raising and we get to $54 million cash prior to next quarter which sounds quite healthy.

May output was 16,000dmt, I can't recall if we were given a June estimate, but one presumes even higher and with indications of improving recoveries such that costs should continue to fall. The cost of production was actually projected to be $15 million with the balance fixed corporate costs etc, so again costs of production per tonne will fall with increasing volumes and recoveries.

Assuming worst case that we maintain costs at $400 AUD/tonne and only achieve floor price for sales, and only May run rate of production (ie maintain $383 margin), next quarter very conservatively gives us $18,200,000 profit putting our cash balance to over $72 million. DFS for stage 2 indicated $120 million, or we could pay down a third of the PALA debt, or hopefully convince another party to loan us enough to cover debt and stage 2 at a better rate. Whichever way you cut it, a couple of quarters anywhere near the costs/tonne the company has indicated will put us in a very strong position and very much leave AJM BoD masters of their own destiny and not beholden to SS, PALA or anyone else, indeed asking for a small JV to complete stage 2 and help relieve debt looks suddenly very realistic.