Hi Gosney - and thanks for a post that'll hopefully get this...

Hi Gosney - and thanks for a post that'll hopefully get this thread back on track!

Some comments ...
- On bulk commodities insurance costs are negligible on a $/t basis. So CFR/CIF often used interchangeably by bulk commodity producers (I think you've assumed that in your analysis anyway).
- Agree with your thesis - PLS will have enough cash to continue both mining and building Stage 2. Posters worrying about an imminent cash crunch and capital raise are IMO just adding fuel to the panic of the last week without sound justification.

However, suggest also have a look at how much yield effects both revenue and margin (it's massive) ... despite feed rates being at design, yields are ~63% (vs design at 75%). That means you only get 85% of the saleable product you thought you'd get for the same mining and processing costs. So there's no way that PLS are currently remotely close to their Stage 1 Feas operating costs or the margins they thought they get from Stage 1 at the time they were calculating funding needs for Stage 2.

So maybe some risk of a CR down the track (if no one buys in at a project level). However, if that happens, I think they'd consider slowing Stage 2 construction a bit to enable Stage 1 cash flows to cover any shortfalls. At this stage with SP6 prices falling and customers not able to take even the reduced avails ... there's no need to rush!

Cheers,
Simon