Flying fox - 2 years left Spotted Quoll - 5 years left In that time I suspect extracted tonnage will slowly reduce and so will revenue. These are the only production mines until Cosmos in 1HFY23 but knowing the mining industry that can easily be pushed back until FY24 Exploration activity ongoing along with existing mine expansions.
My question and concern is what happens when the revenue slowly dries up, can Cosmos outperform the two existing operational mines? In terms of funding I can see why a bank loan wasn't used, the future income is uncertain and that kind of debt can quickly sink the company. Either a bank wont touch it or management is clever enough to know it will be a tight squeeze between a rock and a hard place.
The result is issue of 18% new shares. Significant dilution on top of expected lower revenue, income and return for investors in the years to come. From my mining experience I understand that companies have a duty of care to the environment once mining operations are completed. This will add additional costs to the wind up process.
What will happen to the Cosmic boy processing facility? I cannot be used for Odysseus as it is too far away so it will need relocation if possible or a new one will need to be built, that's additional costs and additional shares on issue.
Thats my 2 cents, feedback is welcome. Thanks DYOR
WSA Price at posting:
$2.07 Sentiment: None Disclosure: Not Held