Ann: Presentation - Business Update/Funding Growth/ Rights Issue, page-6

While Im of the opinion that the bus. perf. has been completely transformed when compared to pcp I do think there will be substantial ST pressures. As Ive said before this is the beginning of consistent profits, but I do think that with the recent SPP there will be some downward pressure particularly on my personal forecasts. This needs to be understood.

Firstly, any suggestion that t/o are likely is just wrong. This company is owned by mgmt and its just not on their agenda. The agenda is long term. The stehr fam holdings and aligned SH block will prevent any interested bidder OR attempt. At some pt the company will go after the gold again which is SBT. Will require heavy R&D but by that time cash should be self sustaining. Such objectives (risks) will stave off t/o interest. There are many more reasons.
Ppl used to say the same thing about TGR but the reality of the situation was that Mark Ryan controlled and owned the co. He was backed by other SHs. Its a good case study.

Secondly, cash flow is going to be a problem now. While NPAT will be good its not cash. Theres no doubt in my mind that operating cash flows will be lumpy. Need to watch out for this as broodstock investment as well as equipment expense will be heavy. Whilst Q118 op cash flow was positive I cant see that being maintained hence the SPP as theyll be short on working capital.

The op cash flow problem will dampen SP. Its unlikely to trade above 6.5c in ST IMO. Ppl should only be in this stock if youve got a 4-6yr investment horizon.