Ann: Quarterly Activities Report - Period Ending 31 January 2019, page-2

I like the fact that a cash flow for the year has been included in the quarterly, but.....

The cashflow shows that it is forecast that we have $300,000 in the bank at the end of January 2020. 

However, the cash balance at the end of January 2020 includes the second payment from CMC of $3.5M (which will be the third payment under the divestment agreement and linked to stage 2 permits, not those currently underway).  This payment is due on completion of the permitting which allows for the mining and processing of the supergene sulphide copper-cobalt-gold.  The "Business Plan Scorecard" notes the timing of this as "Commence Stage 2 Permitting" for North Portia for the quarter ending 31 December 2019.  Note this says "commence" not "complete".  Therefore, noting the delays associated with stage 1 permitting, there is a real risk that there could be delays with stage 2 permitting.  Regardless, these seems to be a disconnect between the scorecard which will only says commence permitting of stage 2 and the cash flow, that assumes permitting is completed and payment received.  I know the cash flow ends on 31 January 2020 which is a month later than the scorecard which says 31 December 2019, I just don't have a lot of hope it will be completed and cash received in that last month.

But that is not all.

HAV's Investec facility has a 12 month maturity.   I thought I had read the starting date somewhere, but the best that I can come up with is early November 2019 (based on 26 October 2018 announcement).  If someone can confirm a date, that would be appreciated.

Therefore, unless my analysis above is wrong, when the Investec facility matures and falls due in early November 2019, HAV will not have completed stage 2 permitting for North Portia and HAV will not have received the second $3.5M payment from CMC.  Therefore, based on their cash flow, HAV will not be in a position to be able to pay out the Investec loan by the time it falls due.

I hope Walter has clearly explained this to the board as opposed to presenting the smoke and mirrors of the cashflow in the quarterly. 

It is disappointing if Walter or whoever approved this cashflow thought it would give shareholders some comfort and we would not see its significant shortcomings.

I hope the board is prepared and planning on how to raise some cash now so we don't get signed up to another last minute deal.