What Cost Overruns?1) I don't see any evidence of additional cost overruns. The drilling for SJT 1 and 2 is substantially complete and is awaiting certification. The drilling was successful and came in ahead of schedule. The construction of SJT 1 is also substantially complete.
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2) Why is this financing such a surprise to all of you? They only had a $50 million credit facility to work with to get a lot of things done. $20 million of the facility is required to finish SJT 1's construction. Another $20 to $25 million is required for SJT 2's revised drilling program. All of this was previously announced! What about Orita drilling, interest payments on both the credit facility and the $77 million project loan, etc? Without a financing there's little left over for everything else Ram needs to pay for.
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3) The $75 million in SJT 2 loans (which I guarantee you they will access without further drilling) is specifically designated for construction of SJT 2. It will be a big cash infusion next month but they can't use it for general corporate purposes. How would they have made their interest payments (not to mention salaries) without a financing?