Well where do I start? , That is a lot of CASH $$$, I can't believe he would invest that amount, back into a troubled ship, the man has more faith than knowledge of the operation I would say.
I am more interested in raw operation results and details, “The on the ground Facts”, than beating around the bush, this Qtly report, gives no solid indication as to the state of the operation, other than some more soft milestone targets.
With Mods to cost +$14mil, and that’s just the mods needed to get the front end running!! (that’s only the CMB circuit.) Then comes the next phase "ramp up", 20% production should be easy takings, but we can't even seem to get to it yet!! Or it has not been announced. It will take over 6mths with little final / saleable product to ramp up to 50% production by the sounds of it, and then the climb to 100% ( 6,300tpa of V) limited cash flow and a high cash burn rate means another capital raising will be on the cards, it will obviously be labelled very positively, in future announcements as cash for something else, but it will be for mods and to keep ATI afloat.
The CMB circuit should have been designed a lot better than it was - thanks very much Mineral resources (old CSI crowd), for not learning from the previous plant design and other Mag plants.
Once there is Mag con on the ground the rest of the plant is going to cost money to commission and ramp up and further mod engineering jobs are going to put a strain on the cash, if not cash flow positive in the short term.
We haven’t heard anything good or bad about the roaster? How is it performing? The roaster is the heart of the operation.
Pentoxide circuit: Premium V is made by batch control, and will Windimurra be able to make the same spec V2O5 as before?? it is a different circuit now, and if the CMB is anything to go by then the rest of the plant is going to have a few surprises. Pentoxide will not increase the raw capacity unless the Ferro plant is a real bottle neck. it will however provide flexibility and should have stayed on the plan from the beginning, as it is a sensible move to have dual product streams. higher revenues will only come from a premium spec product - low Si and Na, ect and “premium” would need to be the best in the world, better than other producers, which is a big call. (No Batch and No Oxalate this time round) a large capital investment would be needed to go down this route and that would be from profits (10mths away??) or a raising. I don’t see any timeline or timing and $ guidance associated with this statement.
Atlantic are real good "word smiths" with their reporting, and the apparent approach. look at exploration, he11 guys, there is more than enough resources on the books for a 25-30 year mine life, what are we still drilling holes for ? send the drill rigs home, save some cash, its only the punters that think these holes are great, anyone could go there sink a hole along strike and "discover some" it's everywhere there. It’s what we call “directors holes” – hole to get results to make an announcement, even when we knew the minerals were there, it just proving something that almost guaranteed.
The only reason windi had the huge resource statement on the books is due to the amount of holes sunk and $$ spent, other sites have not needed to do this, as you only need to keep a mine life of 20years on the books, who wants more when you can see it, look at the photo in the report. Other sites have not needed to pump the share market for cash, which is the only thing the exploration drilling is good for. – “Directors Holes”
It will be interesting to know if it is Magnetite on surface or more likely hematite? I say the picture is labelled wrong! also look how far the plant is away 6km. the main pit is 1 km away, if that. (%Magnetite would increase below surface, as hematite is oxidised magnetite, and closer to surface normally) Hematite has a lesser potential of recovery in the CMB circuit.
With only $57.5mil in cash at the end of the Qtr, Ouch! will it last till we are cash flow positive ??? that’s the big question!
That’s enough blabbering from me, I need a beer, have a good weekend folks.
PS. FYI – I want this project to work, yet have little faith, as the information is not reflecting a solid operation for now.
ATI Price at posting:
$1.10 Sentiment: None Disclosure: Held
