Hotfire There will be a capital raising but how dilutive will it be?.
In my opinion not much and in fact at a max 10% of the the current market cap.ie we only need to raise $25 mill and this will take us from a 50k oz producer to a 180 to 200k oz producer with much lower cash costs.Ads amid tier producer we will be on the radar
Why only $25 mill ? when the mill refurbishment is about this.
1 We have some cash on hand
2 We have an income stream at these gold prices .We were profitable last year and should be more so this year.Furthermore there is the non cashlow section of D+A in that profit. This year we will hopefulllly not have to contend with fires and floods.Better pdn lower costs. As a last resort we may not have to mine Groundrush at all to start off with. Newmont left behind a stockpile which was uneconomic at $600 oz.Today at $1700 per oz it is profitable and can be put through at zero mining cost.
3 Partial debt funding is possible particularly in view of a good track record of repayment , some reasonable assets , a fairly low execution risk through good geology/mechanics and Newmont demonstrating the lack of demons.Our non exec director doesnt hurt either.
I also feel that we could be on a much lower cost curve at the moment with richer grade ore.Added to this we have buillt up our stckpile to insure against floods again so that will be a lower cost this q which we dont have to contend with.
The good news will be put out b4 any capital raising which can then be done at a fair price.Dont think it will be offered at anything less than 90c.
Overall you maybe able to chisel a few @90c but you have a strong risk of not being able to get them below $1 within the next couple of trading days.
Good luck. Would be nice to have someone of your analytical skills on this thread.
TAM Price at posting:
78.8¢ Sentiment: Buy Disclosure: Held
