Orpheus says it?s now cash flow positive

By Romel S. Gurky

ASX-listed Orpheus Energy Limited announced on Friday that it has achieved a significant milestone, becoming operationally cash-flow positive, following the receipt of cash payment for its sixth barge of coal loaded in December.

As outlined in the operational update announced on the 10 December, Orpheus has continued to mine and haul coal from its South Kalimantan ADK project to the Orpheus managed SKJM barge loading port. The company said in a statement it is satisfied that its mining and logistics operations are now performing consistently, with a well-controlled management process in place to ensure sustainability of the company?s operations.

The buyer of the coal is an Indonesian trading group that has committed to ongoing purchases of all available Orpheus ADK coal over the next 12 months under an agreement signed with Orpheus. This is anticipated to be at the rate of 50,000 tons per month, the company said.

Additionally, as Orpheus?s trading operations accelerate, this will translate into a commensurate increase in free cash flow generated. While no near-term increase in the prevailing coal price is assumed, there are existing opportunities for Orpheus?s net margin to be increased over the course of the next half year and beyond. These include:
? Ongoing renegotiations on coal infrastructure rates;
? Selling coal on a FOB mother vessel basis instead of FOB barge basis;
? Further depreciation of the Australian dollar against the US dollar as Orpheus sales contracts are paid in US dollar.

Editing by Reiner Simanjuntak