conf information against our forecast My little add to the last posts.
Last back and forward here have been about guessing the cash situation based on August FS end August and last update from John at the ZH conference.
From this cash situation, we have been guessing if a financing was likely or not, needed or not, wise or not.
I will stick with the latest information, so with what John said at the ZH conference.
But first, could we just sort out one big question: what numbers are in CAD$ and which one in USD$
This makes a HUGE difference.
FS are in CAD…
So I read:
Cash : 46M CAD
Payable : 25M CAD
Last presentation for the ZH conference: they use $ for CAD and US$ for USD
So: Cash burn = 12M CAD
AISC = <750USD
Having said that, as per John comments and presentation:
- Comment: they poured about 10’000 oz and sold them at an average price of 1492 usd/oz
- Slide 6 : Gold Sales: 8200 oz Au
- Comment: Cash down from 46M CAD to 30M CAD end September, Since then, cash flow positive so in his own words : “starting to build up the cash” (minute 6.10)
- My comment : this does not give a clear view of the situation as cash can be build up because payable are not paid, are increasing.. in other terms you are not paying the charges linked to income you cashed in. But you have to assume that they are paying on time charges, just we do not know how much and when. So I assume that the 12M CAD cash burn includes regular payments of the charges, when due.
- My comment: as per givemeabreak comments, a financing could occur not because absolutely needed but because it can be an opportunistic moment to add some flexibility. And do not forget, debt is a leverage for the shareholders if the cost of debt is smaller than the return on investment it generates. And for a Gold producer, would you prefer they do not explore for 1 year or get a financing to explore Raven/Nugget as soon as possible and prove additional resource in the short term? Open question.. Answer depending on each one timeframe I guess.
About exploration:
- Bullish about Raven/Nugget. Will suggest a 10M CAD? Budget for 2020 exploration program there
- Maybe suggest a financing through debts for this exploration program?
So about further financing: so many reason to have one OR NOT J
- The big question here but should we guess from John comments. Here what he said when asked about dividend: minute 13.40, the priority is “to get the debt paid off”