RE:RE:RE:RE:New update by RK... Cash is good...Financing Q1?I would not call myself a long but I took a position last week. I will play the card "Buy on Rumours - Sell on News."
I expressed my sentiment towards Allana last week (see below) on KRN board in a reply to a poster:
Dusoft, Allana has probably the best project on paper (CAPEX and OPEX) but I have two short-terms problems with their project.
1) Allana had $6 million in working capital at the end of October (see link below). As January, we can estimate that they have probably less than $4 million in working capital. If they don't get their financing this month (the company is known for having delays after delays after delays), they will need to go back to the market.
2) The debt side of their project is not an issue as they will rely on development banks. However, their financing will be based on raising 35% of the CAPEX in equities (about $225 million) according to the CEO. With their stock trading at 40 cents (or at 60 cents if the cartel comeback), you can imagine how much dillution there will be. This is the part that scare me the most.
WPX has also a nice project and particularly a nice OPEX when they will reach full production. The problem is how they will get there. Their CAPEX is $3 billion. With a working capital of $28 million and their stock trading at 30 cents (or at 60 cents if the cartel comeback), I don't see how they can get financed.
KRN has to raise between $250 million to reach the first phase of their project (some articles mentioned that they only need to find another $75-100 million). If the cartel comeback, I think it is safe to say that KRN will be back trading above $3.50-4.00. At that level, although KRN will be hit by a lot of dillution, finding a partner to finance the project and raising equities (probably doubling or tripling the amount of shares) should be less difficult.
So, in my opinion, yes Allana is probably likely to be the first one to get financing but I'm not sure that the SP will gain that much on the financing news because of the equity side of their financing. I see WPX share price surfing with the hype of the cartel coming back but the hype will stop there because of their CAPEX. In my opinion, KRN is the one with the most interesting upside.
(working capital = current assets - current liabilities)
https://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=AAA:CN&dataset=balanceSheet&period=Q¤cy=native
Read more at
https://www.stockhouse.com/companies/bullboard/t.krn/karnalyte-resources-inc#pJkYW4bE0zd4xya8.99