GREY:LRTNF - Post by User
Comment by
UptickHedgeon Jan 10, 2023 1:35pm
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Post# 35213847
RE:Northern Ontario Business
RE:Northern Ontario Business The reason was cash flow and (lack of) profitability. 2+ years developing and over $300 mil between debt and equity raised they couldn't become self-sufficient or even site level cash flow positive. On top of that, it coincided with one of the nastiest drawdowns in the broader sector where appetite for mistakes was low.
One could rationalize that reasoning both ways as other developers/producers were producing over AISC when AU was trading at $1616 (the price this finally failed at). So with sky rocketing input cost - in one of the most inflationary periods in decades - and not making it up with higher AU there wasn't enough runway to absorb out of control spending and questionable management decisions only to yield below grade/TPD/output indefinitely.
Since the end of Oct when this failed, the broader market has changed drastically however. And I'm sure many in the company wonder what could have been if the PP in May had been structured differently with those 18 cent warrants that allowed more breathing room to get to more favourable times. That said, anyone can go look at Q3 results and it wasn't exactly rosy.