looks as though the sellers are running out of steam to cover...

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caredes

1,178 Posts.

687

09/09/14

16:58

Post #: 13948213
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Originally posted by leec ↑

dannyb54.True

DML 's downfall was their forecast opex costs were exceeded significantly, productivity was a major part, they just couldn't get the necessary thru put.

ATM, we know Kipoi is at 70% of nameplate capacity. BM has said in interviews they can truck 90t cathode a day when the plant is operating (i.e not shutdown temporary to replace a pipe or something).

At that rate they can achieve production of 2,250-2,350t/mth or 27,000-28,000t/pa. Thats in excess of nameplate.

The big question is the opex costs that go with this output, which we'll know in September. This will guide their decisions on what delay that puts on doubling output (pushing ahead with Phase 2). Or if the sale is not approved by DRC they are fully funded to go straight away to phase 2 which could see TGS with 60% stake and little debt with the taurus facility sitting untouched as a buffer to push to 50,00-56,000t/pa. Remember the debt, 75mio Gerard upfront payment must be paid off by mid 2016. They could even be in a position to be debt free at close of 2016 and ready to pay their first divi in this scenario.

gltah

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looks as though the sellers are running out of steam to cover their position and as the date for the end of the rights issue closers we are moving back up as the true value of the announcement is seen

TGS Price at posting: 29.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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