Resource company Bathurst Resources Ltd (NZX & ASX: BRL) continued the positive trend of previous quarters when it released its December quarter result, according to Forsyth Barr broker Andrew Rooney.
Coal production was insufficient to ensure Bathurst was cash positive and operating cash flows were a disappointing $7.3 million as a result.
Cascade production was a low 8,346 tonnes with the company spending much of the quarter undertaking cutback work. With the cutback complete, production would increase towards 35,000 tonnes per quarter.
He said production in Southland and Canterbury was much as expected. However, with a negative quarterly cash flow and a December 31 cash balance of $10.8 million, a capital raising was probably needed over the next few months.
Bathurst had indicated weak coal prices might stymie plants to ramp up coal production to one million tonnes per annum.
“Bathurst offers investors significant upside if it is able to meet its targets and develop all of its South Buller tenements in a timely manner. We have an ‘outperform' rating. However, the upside depends on the coal price.”
“Being able to develop its permit areas will be helped by the re-election of the [current] Government.” Bathurst was not without risk, Rooney said.
*Dene Mackenzie is business and political editor of the Otago Daily Times.
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