The Cashflow statement says that outstanding debt at 31/3 is $25.4m.
The Investor Presentation says (page 10) that "Outstanding debt balance following debt restructure ($16.8m)".
Is this a misleading statement? Is management trying to say that $16.8m of the funds raised via the capital initiatives will be used to pay down debt? If so, the outstanding debt balance after repayment would be $7.6m ....
Also, they say that debt repayments have been postponed to December, so is this when the $16.8m would be paid off the facility?
Going forward, if we use CCU's cash outflow estimate for Q4-FY13 as a basis, total cash outflow is $12.7m/qtr. At a silver price of $23 (leaving aside the hedges), CCU would require production of about 550,000oz per quarter (184koz / month) to be cashflow neutral. They will obviously burn a significant amount of cash in the June quarter, but its *possible* the production rate will get to the required level post installation of the ball mill.
If this is all correct, CCU would become cashflow positive from any appreciation in the silver price above $23.
Is this how others see it?
Any clarification on the debt position would be appreciated.
CCU Price at posting:
13.1¢ Sentiment: None Disclosure: Held
