Ann: Company Update, page-22

What is there to say. They say there is no deal.

"To date, Capricorn has not received any offer (binding or otherwise) as a result of such dialogue or enquiries."

What a joke.

But worryingly where is any mention of the recently announced debt package and rolling their sleeves up to start building the project. The only reference is to

"previously agreed project financing costs of approximately $1.5 million."

All they say is that there are a list of planned expenditures and how much money there is in the bank and their plan to raise about $10 million to fund those expenditures.

"The Board is exploring a number of fundraising options for the Company, including for the purpose of resourcing the proposed expenditures listed above."

They also go on to say

"The Board is focusing on getting the company’s finances in order before running a proper process in the coming months to revisit past failed transactions and to seek other potential suitors."

I would have thought that the company's finances are largely in order.

When the debt funding was announced in Dec 2018 the company's Non-Executive Chair, Debra Bakker, said

"This is a significant milestone for the project and a major step forward in the development of the Karlawinda Gold Project. The Macquarie Bank funding package reflects the quality of the project and the significant work undertaken by the Capricorn team over the last twelve months following completion of the feasibility study in October 2017 and Optimisation Study in June 2018. This outstanding result removes a significant impediment to the development of the project and we can now push ahead to become Australia’s newest gold producer."

Why no talk of the debt funding or news/talk about the mandatory hedging that was a condition of the funding package? Why are they not talking about going full steam ahead?

When they announced the funding they the title to announcement was

"Letter of Commitment and Credit Approved Term Sheet signed with Macquarie Bank for $107 million"

Why aren't they talking about drawing down the $81 million project facility to start ordering long lead time pieces of infrastructure?

The link below is a summary of what a letter of commitment means

https://corporatefinanceinstitute.com/resources/knowledge/deals/letter-of-commitment/

below is an extract for the link

"Objectives of a Letter of Commitment
The primary objective of a commitment letter is to brief the borrower that the loan application has been processed and cash is available to the applicant. However, for the borrower to access the funds, he/she must meet the specific terms and conditions set by the lending institution. If the borrower accepts the terms and conditions of the loan, they need to sign the agreement. If the borrower fails to agree to the terms, the loan application will be denied or revoked."

The letter of Commitment says the cash is available to the applicant however the borrower needs to accept the terms and conditions of the loan and an agreement needs to be signed. Is that agreement the Credit Approved Time Sheet that was signed?

This is an appalling communication that raises more questions than it answers.

I've dumped half my holdings on the basis of this. If I wanted tickets to the circus I would have bought them myself. I've got better places for my money.Esh