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STA

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9.5¢ strandline resources limited

It is reasonable to assume that they are 'behind in ramp-up',...

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getmurt

258 Posts.

163

22/06/23

09:35

Post #: 68412107
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Originally posted by 2ic: ↑

Thankfully Luke hit the market up for $50M "growth capital" last year while expectations and the share price were smoking. Very smart move and should see them avoid any further Cr imo. Covering costs even if they struggle to consistently hit nameplate production will not be a problem, but that's not the problem. The problem is analysts will re-crunch Coburn's value on lower production at some point until nameplate is proven, and margins per tonne of ore/product are highly sensitive production volume given opex is largely fixed in this type of deposit. That means lower profits, extrapolated out 20 years, thus lower share price.

Way too early to lock in any downgrades LOM imo, but the market is risk adverse and sooner or later that risk gets priced in. Doesn't mean the share price is going down further, perhaps this last fall reflects one or more analysts downgrading STA until performance lifts. Analysts will tell their clients first long before they make such changes public.
I think someone posted earlier that March Qtr production was running at 30kt, about the same HMC as shipped. Little doubt they are behind in the ramp up imo.

GLTAH

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It is reasonable to assume that they are 'behind in ramp-up', the real question is to what extent, and is this being addressed / rectified. June Qtr production figures will provide a more accurate picture of HMC production, and it looks like they are taking steps to address any shortfalls. Looks like risk is pretty well factored in now, but I'm happy to pick up some more if the selling continues.

STA Price at posting: 26.5¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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