not so convinced that was a positive announcement - clearly they are going to have to nurse their cashflow a bit - the mine is performing but base metal prices aren't. They've just lost access to a cash 'buffering' facility so have more cashflow risk. The cash operating costs are higher than the revenue received - so even though a 'profitable' operation, at the moment it is still burning cash if I've intepreted things correctly - now that they've completed the strip this should hopefully change over the next months but base metal prices could still hurt them (even with the put options). Its also not clear exactly when revenue from the mining comes in the door (i.e. how long after processing is the price set and revenue received?). I think its a real pity that base metal prices haven't held up that well - its meant this project is looking a little on the risky side. It will be a while before any of the other exploration translates into cashflow. Pity because the company has done well to get the project on stream and they also have a lot of other interesting prospects.
BSM Price at posting:
0.0¢ Sentiment: ST Sell Disclosure: Not Held
