update out, page-5

I wrote this on 9 Feb:

"Sept qter, av selling price $22.70, cash receipts $3.2m, implying 141 t REO equiv sold (ie and paid for).

Dec qter, av selling price $21.48, cash receipts $6.9m, implying 321.2 t REO equiv sold.

Ongoing operational, production and admin cost actually fell from $40m in Sept qter to $37.9m in Dec qter ( ie even as production ramping up)

Assuming cost are $38m / qter and av selling price is $22, implies LYC need to sell and get paid for 1,727 t REO equiv in a qter.

If I apply increase in sold production from Sept qter to Dec qter ( ie 321.2/141= 2.28) then LYC sold t REO equiv is 731.69 t REO equiv in March qter ( ie 321.2 x 2.28) and 1,668 t REO equiv in June qter."

I predicted 731 t REO, which to my surprise was more or less spot on.

I continue to hold overweight as I think debt situation will be easily dealt with when cash flows are so obviously building nicely.

K