RE: RE: Stormy seas.Management have a dug themselves a big hole by grossly under-estimating the cost to startup Milligan. There is a significant possibilty they may encounter cash flow problems in the next few years. These "hurdles" include;
1) Overcoming lower revenue from from possible lower moly production and higher production costs.
2) Too vulnerable to moly price. A dollar drop in moly price results in a 30 million dollar reduction in cash flow. Many say commodity cycle is on a downward trend.
3) There is a real possibility the warrants may expire worthless in October which will result in a $225 million shortfall.
4) Milligan is a huge project. Further cost increases are possible. What if there is a delay in construction, startup problems, etc; say several quarters or longer?
The above are real issues. How will management address these issues if they become reality.They already have a large debt. A dilution will kill the stock price. Management have gone "all-in" on Milligan. They have few outs, and they would all be negative for the shareholders. I am not confident management is up to the task.
The market seems to recognize the risks. The stock price is being hammered.
Hopefully everything will work out fine.