Clearly there has been some Commissioning issues and they have...

First 62 Last

Share
Profile

Follow
getmurt

258 Posts.

163

22/06/23

17:00

Post #: 68423081
Share

Originally posted by RandallGraves: ↑

Q1 they made 30kt and sold 30kt.
Q2 they made ??? and sold 30kt.

It is possible they have been stockpiling 10kt a month but why would you do that, and why wouldn't you tell the market? Even if you made 20kt for just one month surely you would tell the market that.

I've posted this before but if you had 10kt a month to put through the MSP you would put it through the MSP. If they have been making an extra 10kt and putting it aside then that means the MSP isn't running which I'm sure shareholders would like to know. If they have been making an extra 10kt and putting it through the MSP, then where did it go? They didn't combine it sell it as HMC otherwise the shipments would be 20kt not 10kt, and they haven't made any final product shipments. If they have put 30kt through the MSP then they should have around 25kt of final products. Allowing for poor recoveries during ramp up you could downgrade that to maybe 20kt or 15kt. It's possible they have sheds full of final products in Geraldton awaiting shipment but again if that was the case why wouldn't you tell the market?

Also I think you are referring to a fourth mining unit which is part of a future expansion. Even if they hit the go button on a new mining unit today (plus whatever other upgrades they need) those things cost $5-10m and in the current market take probably 6-12 months to get.

Expand

Clearly there has been some Commissioning issues and they have not been able to consistently produce at nameplate from the WCP, hence HMC numbers are lower than anticipated. Although, we don't know how much lower until figures are released in the Quarterly. As another has stated, some of the HCP is undoubtedly being stockpiled, and some probably went through the MSP. IMO the WCP issues are temporary and can be resolved in 2H23. Delays to ramp-up for the MCP are more concerning, but again we don't know how much HMC has been processed to date i.e. how much final product has been produced.

The SP was priced for perfection and there is always inherent risks with Commissioning. The Market has now priced in those risks IMO, which creates significant upside potential once these issues get resolved. I have no issue with the SP sell-off, because it represents a great buying opportunity IMO. Market cap. is very undemanding at these levels.

STA Price at posting: 27.5¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

Reply