RE:RE:RE:RE:RE:So now our market cap I do not need a time machine Bigops... all this was foreseeable! Note that it's the management’s job to make certain assumptions and that's what they are paid for! They have financial advisors, market insights, etc. to which we have no access.
To your point - last year inflation was at its peak, everyone knew it, and everyone was expecting the interest to rise (not know how much) but still, US$114M is a significant change.
Many on this board were wondering about the low increase in CAPEX for the 2022 FS, including me (you can read the history) but went with it.
Then in Jan 2023, when asked about it – JSL reconfirmed that the Capex is good, tested, etc. Inflation and rates going up were everywhere on the agenda at that time but he still had his mischievous smile and reassured us that it’s all good! And now we are getting the updated Capex - and on top of that, I still think it’s not enough as they only carry a 10% contingency!! They need at least 30% in the current price uncertainty.
So expect another revision in a year after construction starts. Mark it and blame me again next time.
Here is the history of their prediction:
2017 – C$341M CAPEX (initial)
2022 – US$357M Capex (C$444M)
2023 – US$471M Capex (C$611M)
For the price deck – who here expected to see an increase? Overall market is heading down, but hey, we are going up. No problem, but provide context about it like ‘based on our ongoing financial discussions we increased the price deck as that’s where the long-term contracts market is going’ or something similar. What we got is nothing and the taste left is that the increase is to mitigate the Capex increase. Maybe it is maybe it is not, We won’t know until a deal is announced, and gain – since they raised the bar even higher, if they don’t match their own assumption this will not go to $4 or $5.
Further – no update if they hit the 65% engineering progress? Is the design advanced so they do not expect any major surprises or cost increases? No, no word on it - this is not inflation, it's under management control if they end up with higher costs due to changes.
I stuck around as I was expecting drill results this summer with a good resource update (still think that the mine life is the issue) and a deal by September, but all this is now off.
Now they need close to US$500 to raise – in a higher interest environment where money is more expensive and more projects coming online globally. Any deal in Q1 would have been better, but again, they do not feel the need to tell why it didn’t happen.
You can keep cheering management, it’s your choice, and I can choose to criticize them, it’s my choice, when they do not meet their own targets or when I feel that the way they do things will put further downward pressure on the stock.
Still believe in the project, but I’m not buying back for now as it will go lower. Follow the Market, and look at the volume – it‘s pathetic so no one is buying in, as they all expect equity to be issued regardless of what this management said – ‘we will not issue shares at these prices’!