First let me say I’m a fan of OVL & it’s excellent prospects!...

First let me say I’m a fan of OVL & it’s excellent prospects! However the announcement on 19th January "Initial 1,650m Drilling Program Planned at Topacio"was intriguing in that it provided very little new information when compared with the 7^th December announcement, except that:

1. The drilling date moved from “Commence early in the New Year” to “Commence in the first quarter 2017”…. With the words added: following final approvals.

This implies a slight delay, with approval to proceed still required: all up no big deal, a relatively normal delay.

However it begs the question, why make the announcement, when everything else was the same, just rehashed?

It caused me to have a closer look at their cash flow statements…. The key thing that becomes obvious is that OVL are running out of cash & will need to do some form of capital raising. So then the reason for the positive announcement becomes clear – ramp up the share price ahead of the trading halt, & the “discounted” price for the capital raise.

The important thing to note in the cash flow statements is that Newcrest are paying for the drilling – but only the drilling – not OVL’s corporate & admin running costs which amount to approx. $100k to $200k per quarter...

Cash at end 30^th Jun16 = 543k
Cash at end 30^th Sep16 = 1,016k
Expected cash burn QTR Sep16 = 400k
Estimated cash at end of 31^st Dec16 = 616k
Assuming same cash burn rate for QTR 31^st Mar17 = 400k
Estimated cash at end 31^st Mar16 = 216k

!! Not much left, & from a Director’s point of view with insolvency laws, far too close to call.

IMO only, DiaYOR