Unbelievable, page-25

As I understand it VXL have a take or pay contract and other salescontracts that covers their anticipated production (at an average price of US$1335/T - FoB Adelaide); I don't think sales are a problem; the issue is producing the graphite and the capex (and delays and working capital) required to address the catastrophic low production (2T/day) from the existing plant. Probably the least cost way is to leave the plant on 1 shift/5 days per week (I assume it is on this now) and only move production levels up to greater levels when the plant generates +ve cash (i.e cash flow is greater than $2.5m in the next quarter as this is the budgeted production costs for next quarter). To make the next quarter's production cash generative production needs to above ~18T/day (the company will still lose money as overheads of $1.2M and quarterly interest of $150,000 will not be covered). To actually generate +ve cash flow the company needs to generate A$4m a quarter which means it needs to process ~24T/day (i.e. ($4,000,000/.7 (A$/US$))/(1335 (US$/T)*90 (No. of days)) for 7 days/week operation. On 5 day/week 1 shift operation the daily production needs to be ~33T/day for the shift (currently 2T/day)