RE:RE:follow up on contribution margin (revision up)The numbers - if anything are probably conservative. If anything is high, it is your expectation on timing and reaching name-plate capacity.
There is a real disconnect between investors and "the-management-of-resource(s) (or resource companies)".
A recent poll indicated most investors will dump a stock within 12-months if it has not performed to their expectation (no wonder so much wealth is squandered in equity markets: fidgeting, selling, buying, changing etc.)
Victoria Silica has a resource position good for (what?) 20, 30, 40 years. Some investors in resource realise that reserves get bought for a long time into the future, and not so much next quarters results.
It may take 6 quarters to be shipping at 500,000 tons p.a. I can wait.
To be honest, I can be as impatient as the next investor, I'l equally like to see this trade at $3. I need to check myself, patience is needed. It will happen maybe not as soon as you (and I) would wish.
I'd also argue that managers of junior exploration/resource start ups are also prone to short termism.
Finally, listening to SLCA - logistical capability, and processing capability become key resources in this industry - the phase 3 processing plant may also become an added key competence in this business.
I'm also hoping that they can produce more than 500,000 tons of sand p.a. With 4 crews working 24/7 (as they state in the late October release) - I would see no reason why they can't do 800,000 tpa. I think that is a fair volume - if they are working around the clock. Most commercial sand plants easily mine, wash and screen 600,000 tons p.a.
I think there is legitimate volume upside there.
Keep in mind prices are high: when you look at their products.