CAS was supposed to be funded through to the bfs stage of Borborena, which was to happen toward the end of last year, then start preparation for financing and building the plant this quarter. ME was very cagey about their funding position and of the salaries being paid when asked during the presentation last May, only saying they raised $6.5m in March and paid down debt. He wouldn't answer the question regarding cashflow, only saying those figures would be revealed in the July accounts. Well it was down to $1.35m at the end of the June quarter, with expected outflows of $450k for the Sept qtr, which actually came in at about $1.1m, leaving just over $200k at the end of Sept. So the cost cutting activities undertaken by ME and the board didn't eventuate as he said they would in the presentation at the top of the Hot Copper page. So one has to wonder why the company didn't look to offload the other 3 projects on the books to sure up the cash position prior to getting into this position. Bad management is my guess. One of the problems I have seen in quite a few small explorers over time has been with employing high profile managers from large companies, is their ability to operate on a small budget. It's easy to achieve great outcomes when working for the likes of BHP and Rio, but learning to get by on smaller cashflow often seems to be beyond their grasp. Now we all pay the price for their inefficiencies by being heavily diluted and suffering through a huge influx of cheap shares that will keep a lid on the sp for a very long time if they don't fold completely. As it stands now, there will probably be nearly double the shares on issue just to cover the current con notes and the next capital raising, before even undertaking the share rights issue. This could easily have 2b soi by the time it lists again, and probably still only have a market cap similar to what it currently has. I note CTL is going the same way. In both cases its mismanagement imo. I guess its better than ending up like WPG, but only marginally.
CAS Price at posting:
2.0¢ Sentiment: None Disclosure: Held
