My ThoughtsThey failed to obtain a JV deal. This is bad. Everyone expected that they would be able to close a deal with a major, Jennings, Cannacord, Macquarie et al. Why did they fail? Were they too greedy? Were the offers unreasonable? Maybe what they were proposing was unreasonable? According to the NR, their targets were validated by these companies so I doubt it was because they didn't like the prospects.
Simon has been very reliable with his information to date and I will accept his statement that they were offered 100million, however, do we know any furhter details? Was that cash up front? Did they want 90% as well? These deals are far more complex, so I highly doubt it was 100million up front for 40%. The fact is we just don't know anything more about the negotiations. They failed, and they should be held accountable for that and I hope anyone that is able to attend the AGM will throw these questions at them.
Now they're stuck between a rock and a hard place. They have a deadline to complete their requirements on the concession or lose it altogether. Raising the money is their last option. Yes it's dilution, yes it horrible timming but what else can they do? They don't have the money to drill and apparently nobody wants to jv under their terms. Do we continue to wait for a deal to mature and risk losing it all or perhaps take a bad offer where we lose most of the conssession and still have to raise money to drill?
I don't see any other option but to raise the money on our own. I also think that they will be successful in raising the money, and if so, we'll be back in business and maintain 100% of the concession. Maybe I'm giving these guys way too much credit which they don't deserve. It cannot be easy to raise over 60 million for this company, so if they do, that would bring a lot of confidence back.
They will also be in a much better position to form a JV down the road once the money is raised, drill rig acquired and a definitive timeline in place. To me it's always made much more sense to drill Georgetown first. They already found oil there and from what I've read, the targets are much larger than Corentyne.
If I'm wrong and they can't raise the money, the story ends here. It's over. They're left with a 25% stake in George.