"The ability of the Company to continue as a going concern is dependent upon the successful completion of the Issue. For this reason, together with the other matters noted above including the ongoing support from the Company’s major shareholder, the Directors consider that there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable and the Directors are confident that the going concern basis of preparation remains appropriate."
Recently:
"The Company has now raised the full $65.3 million sought, through a mix of existing shareholders and the underwritten component."
That Mr Lee Seng Hui has seen fit to convert a significant part of the loan to shares is a recommendation of the companys' viability I think. That the financier has taken a large stake as an ordinary shareholder rather then secured debt over the company is a vote of confidence. Also, it may make it easier for further financing should it be required.
The funding issue is now solved for some time to come.
Proceeds to be used for $51.35 mil debt AP finance $1.41 mil interest -------- $52.76 mil less issue costs, funding of DFS at the CTP.
Net Proceeds $7mil cash aprox after the above.
Also drew down $6.5 mil cash from new unsecured loan, so presumably cash position is around $13 mil, leaving only a relatively small amount of debt. So it doesn't look like the company will go down for lack of funds for a little while, though they are likely to have to borrow more money for further developments.
The Kavanagh results indicate good possibility of future success. They have a processing plant with capacity for trating a large tonnage per annum. Combined resources total 3.1 mill ounces as reported in half yearly report, equivalent to around $4.5 billion once dug up and processed. Preliminary estimates for kavanagh are 700,000 t0 800,000 tonnes of ore at 10-15 g/t. Say 7+mil gms, around 250,000 oz.
So, all in all, at .17/shr, cap value of $100mil, potential of gold sales of several billion dollars over a period of years, this company is imo a pretty fair "gamble" as you put it silver - and I'm in at that price!
TAM Price at posting:
12.8¢ Sentiment: Buy Disclosure: Held
