At the end of March Qtr 31/3, they will still have US$64.5 million in cash. They still have enough cash to last them 3 more quarters assuming the same cash outflow of U$16 million per quarter.
But I think, tehy should turn cash flow positive by end of June qtr 30/62020. Though not by much.
It will all depend on the average ptice per tonne they receive and also the amount of tonnes per qtr they are going to sell (demand).
But they will have to get the cash cost per tonne down to around the US$440 to $450 a tonne (plus shipping costs of $50 a tonne). Those costs are assuming they have hit the claimed maximum 25% a tonne reduction they hoped to get. Oil prices at record lows should also help lower transport costs - assuming the contracts are negotiated right with the transport companies and they have not hedged in the oil price.
So, if price can get up to around US$500 a tonne they should be fine. It is not unrealistic. And we hope Governments introduce some big stimulation policies to get manaufactueres to produce more electric cars, buses and vans.
Aust. Super convertible not os US$55 million does not have to be repaid until 5 years. They have done this to protect the value of all the money they had put into it and salvage somehting. Princess Kate if right about a potential takeover target. Surprised none has come yet - though I think most companies are having to focus on managing the Covid 19 virus. But maybe in the second half of this calendar year, it will come. If they have a good June quarter and some strong demand has come from EUrope, USA, Japan and South Korea, China (which became a net importer 12 months earlier than planned) will start to have to pay much more per tonne. I reckon by 30t of September, prices should be US$560 to $600 a tonne.
If share price gets up to say 50 to 60 cents, takeover may come at $1.30, though if competition comes for this key asset, it could push up to $1.50 to $1.60 as a final price. Trick shareholders is to never sell out to the first offer - it is usually not the best or last offer.
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