RE: Guidance Under Review6 May 2026 16:42
Some solid points raised on the working capital swings, EBITDA composition and net debt, but I think the critique is painting it a bit too bearish overall. This is a classic mining expansion phase — lumpy, noisy, but directionally positive.
Working Capital
Stockpiling low-grade ore at Molefe for the on-site upgrade plant is exactly what they said they would do. Yes, it eats cash short-term (inventory build), receivables up on timing, payables moving around — normal for any ramp-up. Process costs are rising as expected with higher throughput, but those mining costs on the stockpile should eventually flow into COGS with better margins once processed and sold. Not a red flag, more execution of the integrated strategy.
EBITDA
Copper EBITDA turning positive (+$0.2m vs -$0.8m) is real progress even if you strip out some accruals/interest. Group EBITDA +$2m is helped by non-cash and one-off items (as usual in these reports), and yes copper is still carrying some group costs. No strict IFRS rule on EBITDA — we all know that — so best to look at the cash flow statement and reconciliations. Revenue +70%, gross profit jumped massively, margins expanding to 21.8%. The trend is the important bit.Cash, Capex & Debt Despite $11.8m capex in Zambia, net cash is up to $11.5m and net debt down to $8m. That's not nothing.
The $25m SA disposal proceeds (already in the bank, on schedule) were always earmarked for exactly this: funding the Zambia transition, working capital build, and paying down debt. They've already reduced facilities by over $10m. The Absa RCF at $7.5m is the remaining piece of the old Mauritius facility — not a desperate new loan.Yes, reversing WC will use some cash, and trade payables aren't in "net debt", but the liquidity position is clearly stronger post-disposal. They're not at the total mercy of bankers any more than most growth miners with debt facilities.Bottom line
This is the messy middle of exiting SA, focusing on Zambia copper, and scaling the mine-to-metals model. Headline numbers show clear improvement, cash buffer is there, and the strategy is being funded as planned. Execution risks remain (Molefe ramp, Sable throughput, cost control), so H2 will be key.
Fair points on the banking facility still sitting there and the use of proceeds note. But calling the SA disposal “pocket change” for the only cashflow positive asset is a bit much. They’ve already received US$25m (on schedule) out of the bigger deal, exactly as planned to fund the Zambia copper pivot without heavy dilution. SA chrome/PGM had its own issues anyway, so exiting to focus on higher margin copper growth is the strategy Leon’s been talking about for a while.
It is always best to re-do the numbers when new numbers are presented.
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