Empire History 101, page-42

Hey Sabine, I found a big chunk of the $11.6m Free cash flow that I have been looking for.

Digging back into the ERL prospectus “company highlights of Nov 2006 (real History 101) I found the clues.
In one paragraph it is said:
Currently it’s (ERL) priority is to drill test existing areas with the aim of establishing an early cash flow from its Penny’s Find Project.
Which is followed by:
Empires Directors have extensive and proven experience in exploration, mining and development, as well as considerable Public Company experience.

You see, I thought early cash flow might mean “in two or three years” (and obviously so did a few others who supported the stock well above its issue price of 20c).
So I got that wrong. Then I thought, maybe I also got it wrong about how good these guys are (Prospectus)
Jump ahead (recent History) to the finance deal for the pit when the project finally got under way in 2017 (after the re-born Brimstone entered the scene). What a deal it was. Obviously a very unique skill set required.
March 2018 Appendix 5B
“The JV has an agreement with Blue Capital Services Pty Ltd to fund mining costs up to a maximum of $7.5m of which $877K is outstanding at quarter end. THE JV OWES A FACILITY FEE FOR THE COST OF FINANCE OF $4.0M”
$4million effectively for a 12 month $7.5m Facility !!!! Absolutely unbeelievable.

So thats one component that has wiped $4m off the free cash flow – whether it $7.6 or $11.6m.
And typically, not a word of any potential costs against the Free Cash Flow in the announcement of 21 March 2017. (Although it was mentioned in Sept 2017). How many of us thought Free cash flow was the end figure, before tax etc.
What also sucks is the fact that it was to be up to $2.3 max until the mining operations are cash flow positive – well sort of, because on the next page it said “for only 7 months” (ERL:ASX:21-3-17) – and that obviously, while given little consideration, was the bit that bit.
Incredibly our astute leadership managed to/had to extend the facility for a few more months for – wait for it – another $1.7m! – making $4m for a $7.5 facility for around 12 months!
This would appear to be the only cost that has been detailed.

The question is, how many other equally “astute” costing decisions have been made by these mining experienced directors and what impact have they had on our Free Cash Flow?