Petaquilla Minerals Ltd PTQMF

RE: RE: RE: RE: RE: heap leaching

[wwadehammer]

Bob,  when you look at the May 31, 2012 balance sheet you will see that PTQ has about $7 million in cash like assets and around $50 million in short term accounts payable (A working cash to debt  ratio of  .14).  Normally, a ratio of less than 1.5  would indicate a company in dire financial condition with concerns about it being a going concern.  PTQ's ratio is one/tenth what is considered minimum.  The auditors did not discuss the issue of whether or not PTQ is in danger of going bankrupt so I guess PTQ has enough cash flow from gold sales to keep the creditors at bay.  But this poor ration is not a good situation.  The company obviously has to borrow a significant amount of money or dramatically increase gold sales reduce this large accounts payable balance.   They say their negotiating a $210 million debt issue which makes a lot of sense.  If they don't get it, they might be unable to pay current liabilities which would force them into some form of bankruptcy protection.  Their lack of ability to increase production from both milling and heap-leach as fast as projected could come back to haunt them and us shareholders.