Morella Corp Ltd (ALTAF)

[tikotiko]

The report looks flawless in terms of operations, production and shipments. The concern is that they are not getting top dollar for what they are selling. They chose not to mention it explicitly., but You can work out the numbers and will see that they are barely making a profit. This is a shame for the 60k tons that were shipped. I fully realize that this is not Altura”s fault and that this is due to the current proces which suck. However, they have major debt payments coming soon and they are going to need to get the money from somewhere because cash reserves are quite low again. The possibilities are: selling prices increase (unlikely until 2021-22), a CR (undesirable but may have no choice) and another refinance to reduce the current 15% interest, which would save a few million $ per quarter. I think that they are probably working hard on a new refinance ,which should be feasible based on the fact that PLS just did one at 5%. I would also suspect that the refinance would be accompanied by a small CR to get cash and perhaps something more about Phase 2.

A separate positive note is that the AJM charts shows a bullish golden cross with the 50 SMA recently surpassing the 200 SMA. This happened 2-3 days ago. They ALTAF chart does not show it due to all the halting and recent zero volume, but I would go by AJM IN Australia on this one. We just need to wait and see how the market reacts to the quarterly report. I may buy a few more if I see a nice dip.