[ATTACH] Couple of questions on cash flows and how susceptible...

Couple of questions on cash flows and how susceptible to a CR PLS is if commissioning drags on (not suggesting it will – just a ‘what-if’ scenario).


Cash balance at 31 Dec sat at $200m ($72m + undrawn debt facility)


In the picture above from the most recent presentation there is about $160m left to spend between Jan-July.

There is about $10m in interest payments to be paid between Jan-July

There is about $10m of overheads to be paid between Jan-July

There is about $15m to be spend on Stage 2 DFS and drilling for stage 2

There is 16.1m options to convert on 16 May which should provide $7m cash flow

DSO sales start around late May/early June – at rate of approx. 100kt per month. Assuming a margin of $20/t (and they need to repay Atlas the prepayment facility) – this will bring in around $2m a month from June. (assume it generates $4m by July).


With all that said the cash position looks to be around $16m at July 2018. Given they will need working capital to fund the first month or two opex before sales revenue – there is not much buffer there for either another overrun on capex or a delay in commissioning before the cash is drained.


What options does PLS have to draw on additional capital if there is a hiccup or two? Do you think they can draw Gangfeng etc into a prepayment arrangement? It seems very difficult to get money out of China? Or can they draw on the stage 2 loan early from Great Wall / Gangfeng? - isn’t this to be used to construct stage 2 only? Does the capex figure included a provision for ‘working capital’? I can’t see that it does.


AJM have come out today and commented on all the weather delays in the Pilbara and have now pushed out wet plant commissioning into April/May and there is a comment on the announcement about about coming online in June (amongst other comments). PLS could potentially not have first sales until August/Sept. Not attempting a down-ramp just wanting to get thoughts on capital funding options (without the need for further dilution).