RE:RE:RE:RE:RE:back to work1kgcoffee wrote: The problem has always been increasing tonnage to the point where they are making money. DGF could be the answer. Share price could look very different in a years time if they avoid bankruptcy and start maxing out their milling. Could washer front $500k, or arrange for a small financing? It's entirely possible. Will Green Oil keep good on the deal? Maybe.
He has less than two weeks. Then there's the issue of taxes and concession fees owed to Ecuador. Maybe they can hammer out a deal. Washer seems totally unwilling to throw in the towel. He's the reason I bought into DMM and stuck it out so long. I have no doubt that believes, and is willing to put his own money down. I haven't sold a single share since 2014. Call it stubborness but I'd rather ride this thing to zero than sell for less than $6.
Let's not pretend that DGF could be the answer, DGF is the answer. Zaruma might be able to support most SG&A and general mine expenses, it will cover the employee costs (paid for out of the 20% cut they're taking) and we're assuming the government is willing to extend out royalty/tax payments.They still need to fund consumables which might be tough given how much they owe suppliers, but perhaps they can cash and carry with new or existing suppliers.
Having said that, for years Zaruma funded mostly decline development, SG&A, royalties, depreciation, concession fees and taxes purely out of mining a handful of resource grade faces. If we assume that efficiency will increase because 1) labour is now only consuming 20% of net revenues, much smaller than usual 2) they hire contract miners 3) they are no longer funding additional decline development but purely focused on exploitation and 4) the Ecuadorrean government is willing to defer royalty/taxes/concession payments then there's a pretty good chance they can be cash flow positive at Zaruma, if barely.
But that doesn't leave any extra money to pay down outstanding supplier payables or the Vertex loan. The only way they're doing that is a cash infusion of some kind or DGF. Even to survive until DGF is operational is probably going to require cash regardless of if they are able to extend out the Vertex loan.
I want to see the company to sell Jerusalem. If they can get $10 million for it (it's 1 million oz of high grade surrounded by EGC's lower grade open pit concessions and the obvious play is to develop both simultaneously), that rights the ship for outstanding payables with the suppliers. The workers are already sorted out. The Ecuadorrean government will get paid out once DGF is operational. It leaves them breathing room on the Vertex loan.
I agree about Washer, that's actually why I'm still here. But no CFO and a completely vacant Vancouver office is a bit of a scary proposition. Hopefully they can find someone retired but qualified that would be willing to step in the interim for shares or something to that effect until they can right the ship and hire someone.... but in my view the reason Naomi, Nick and Reuben are no longer with the company is because Washer stopped paying them (no cash) and they were being asked to carry on unpaid. They have rent and bills to pay, so they were forced to move on. I have more reason than pure speculation to believe this is why they all left.