scenario, strategy, battle and war, page-170

JJ, I've given you the best probable explanation for the cash neutral in April, which ties in with what the company told me and ties in with what Eric has been saying.

It is so simple. "We are selling everything" says Eric. Inventories at the end of March were ~ 650t - if they were sold and paid for in April, that's your cash flow neutral for April without operations being cash flow neutral. Once again, call the company and discuss the concept of cash flow neutral instead of continually speculating that they are out of the woods after the April cash anomaly.

And JJ, just look at their burn in the March quarter EXCLUDING the debt repayment and the CAPEX. Of course they always said COP will be higher during ramp up - I always said that too to be howled down by some here that it was a load of bull because LYC had everything under control - but by the March qtr stage then costs should be largely under control, and the marginal cost of production should be around $12 rather than $25. After all, Eric has been cost cutting for two quarters now. If he's happy with that current level of success - well, I'm sure you are happy too.

qbal, no, I didn't fall quiet when you issued your wager, because I agreed with you that the marginal cost for Q2 WILL be below $23 (I think that was your suggested number).

Your forecast is that they will increase production by 125% for no extra costs. It's easy for me to beat that, by saying that costs will be $10 more! Perhaps you could also give a more detailed analysis of what you think the Q2 production and COP + admin costs will be too. I'll be back with my numbers later.