Originally posted by luanboo
Furnaces, great summary. Would like to just add a few key points.
A) The cashflow report that we have read today is for A40 only. 40F has some cash and cash equivalent in the balance sheet that has not been considered. So, the group probably have more cash than what we have seen.
B) Do we realise that - 1 day after the merger (ie 18-Dec 2018), Alliance announced that Mark Turner was made the Executive Director for Operations (and he was originally designated to be the merged co Chairman, for those who don't know the details). Why the sudden change immediately after the merger? IMO, it was not a sudden decision. Alliance had moved from Development to Production stage and needed someone very experienced to focus full-time on managing the Baldhill operations and MTurner is the ideal choice. But the company was unable to effect that while the merger drags on for 8-9 months.
MTurner is a very experienced COO and you can just look up his profile on google. Do we think it is simply a coincidence that our DMS started to run well since the later part of Dec 2018 (after his appointment as ED for Ops)? I choose to think that having MTurner to focus 100% of his time on Baldhill, he had a good grip of the operations very quickly and had successfully made his presence felt. Hence, I felt very comfortable going forward that the production will consistently running above nameplate.
C) In addition, with MTurner, it really takes the load off Mark Calderwood to focus on the commercial aspects of having renegotiated the Burwill offtake to free up half the output and now negotiating the new offtakes with multiple parties (for spodumene and tantalum)!
Yes, we have been punished for the not-so-great Dec 2018 quarter. I have confidence that this and the many subsequent quarters will be great. All IMO. DYODD.
Luan Boo, reread the reports again, indeed we should have more cash than is reported. If Mark Turner can continue this great work since he started his appointment as COO, he deserves his renumeration.
One very important thing I noticed is that the management does not "market the company extensively", which to me is a bad thing in this competitive world.
For example, we know that from several calculations, that the plant has a current run rate of about 14% above nameplate capacity of (155ktpa), reaching above 180ktpa (actual production), yet the company does not put it out in the announcement. The company could have put out a statement saying plant is running above nameplate of 155ktpa. It means a lot instead of having investors trying to do calculations to get the production rate.
The part on cash flow is also misleading. The company could have made it clearer that it was from Tawana only. Market probably panicked on need for CR.
AIMO.
