RE: RE: Company UpdateI'm sure the 150 million repayment is stirring up the BOD on this one. Sounds like they are looking to some cashflow through the door, however with 68 million in the bank im not sure what what they can do to find something to suite their needs. I'm sure TCW will renegotiate the terms if MOL can show earnings but it may be reaching the point of liquidating some assets to cover these dues...They ultimately need moly prices to increase or a bid comes table...
Between Derek Fisher and Forrest you would think they could get what they are looking for, equity markets are opening up slightly, this one may scrape by! The window may be closing or just opening up, one hell of a property, lets see what they can pull off.
------From the quarterly report--------
In September 2008, the Company completed a US$150 million debt financing facility (“Interim Financing Facility”) with the Trust Company of the West (“TCW”) that was designed to bridge the Company’s development expenditure for the Spinifex Ridge Molybdenum Project to be either paid out via the full project funding of Spinifex Ridge or rolled into a full funding package. The Interim Financing Facility, including interest, is due for repayment by 31st October 2009.
In the near term, the current price of molybdenum (US$8.00/lb) does not support a full project funding from the debt and equity capital markets for either the 20 million tonne per annum or 10 million tonne per annum Spinifex Ridge development scenarios. It is likely a sustained recovery in molybdenum prices would be required to support any new debt financing.
Despite the depressed state of the molybdenum market, the characteristics of the metal and a constrained supply side support a strong medium term price outlook. As the economy-boosting, infrastructure development programmes of the major countries commence, demand for the metal could return quickly leading to a sustained increase in price.
The Spinifex Ridge Molybdenum Project, either in its 10 million tonne per annum or 20 million tonne per annum form, remains a viable opportunity for strategic investors seeking a long term stable supply of molybdenum.
In recognition of these circumstances, the Company has undertaken a number of activities, including review of potential projects for acquisition utilizing the Company’s excess funds. TCW’s approval, as credit provider, will be required prior to any such acquisition.
At March 31 2009, the Company had US$67 million cash on hand (A$98 million) with limited net cash spend anticipated during the period to October 31, 2009. The Company is seeking to apply this cash balance to new acquisition opportunities whereby the targets existing or near-term cash-flow could assist in the restructure of the Company’s financial obligations that become due and payable on October 31, 2009.
The Company’s technical team and its advisors have identified and assessed a large number of attractive projects located throughout the world. From these a shortlist is now being subjected to detailed review.