When should we buy Strandline (STA)?
At 10c is STA now a buy? They are now in production and should be throwing at cash
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Answer
Hi Peter,
We view it as a highly speculative buy, but with still plenty of risks on the horizon. They did announce that they will make the first shipment of zircon in concentrate (ZIC) from the Coburn project in October. It will be a 15kt shipment which should generate about $21m in revenue. Further shipments are likely in the December quarter while they are continuing to work through issues with their Mineral Separation Plant (MSP) which would allow them to begin selling standard or premium grade zircon.
Revenue from these shipments may be enough to see them through without needing additional capital, but that is still a risk given they carry debt. If they scrape through, the stock will be higher than where it is now, but they don’t have a lot of room for error, making an investment here and now, very uncertain. Not one for us because of this risk.
