Your thinking matches mine - the current share prices is bonkers...

Your thinking matches mine - the current share prices is bonkers - massively below where it should be.

If we look at the Feb2021 investor presentation, Commissioning of Stage 1 was scheduled for March 2021. This commissioning enabled ore to be produced in Q2 of 2021. The first trucks were reported to depart by 8 June and the first ship to leave by 15 July. These timelines included any inefficiencies from being a first-time start-up.

If we look at the Sep2021 investor presentation, Commissioning of State 2 is scheduled for Feb 2022. If this timeline is hit, the 1,023tpa production profile may even be applicable for the last quarter of the the 2021/2022 financial year. The 2022/2023 financial year will start with a production capacity of 1mtpa. Even if stage 2 commissioning is missed by a month or two, the 2022/2023 year may well still start with a 1mtpa production capacity.

Assuming there is demand, a realistic 2022/23 revenue estimate would appear to be A$230m - A$276m. The forecast post stage 2 production is 1,023,000 of processed ore. The grade is within the 30-35% contract specification. The 25 Aug 2021 presentation table on page 2 has the feed ore concentrate of 33.7%. Page one notes the HP test programme utilised run-of-mine concentrate from the stage 1 plant. At least in the samples taken, they were generating 33.7% concentrate in the ore mined, which is slightly above the 3 Dec 2020 DFS of 33%.

The 44% Mn price which output is linked to is already over $5 (OHM reported $5.22/dmtu in their Sep Quarterly and $5.15/dmtu in their June qtr. I think prices are up since then. My understanding is that there is a non-material discount to this as credits for a high silica content and a good impurity mix substantially offset the grade being lower than 44%. The above revenue range uses US$5-US$6/dmtu and an AUD to USD exchange rate of 0.75. The maths is then simple: 1,023 * 33.7 * 5 / 0.75 = A$230m. The Dec2020 DFS estimates costs at US$2.65 so at prices above US$5.30/dmtu the pre-tax margin is over 50%. Even if costs were 10% higher than expected, the margins are still strong.

The quarterly (Tomorrow?) is key because it helps confirm the revenue from the first quarters sales align to the profile expected. E25 would appear to have sold around 54,000t in the last quarter. It may be as low as 53,000t. Two ships departed at circa 27kt each (although the June quarterly noted loading 26.2kt). The quarterly may confirm the volume shipped. The rest is backward engineering the average cost per ton which can then be re-multiplied by 1,023tpa to get a forward looking guess.