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FY results released this morning where the key historic number is the gross margin highlighting just how low cost the operations are. More interesting is the Q1 update and funding situation. The ramp up has clearly not been as fast as expected as they are managing the business tightly for cash given receivable terms. They state they are operating cash flow positive at sales of 800-900 tonnes per month and they sold 2,772 tonnes in Q1 so they are now operating cash positive on a monthly basis, subject to working capital movements. While the tight cash position is constraining the timeline for future capacity rollout, the company appears to be taking the decision not to raise additional funds at the current valuation and is instead looking at receivable financing and managing the growth of the business with available cash flows. While I have a lot of respect for that, if it proves to be the case, it doesn’t rule out that some additional gap funding may be required as the company states
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