RE: RE: RE: RE: NEWS ... NovaDx Reading between the lines of the news release, it looks like NovaDx will go the way of Royal Coal. The Rosa Mine is unprofitable, otherwise it wouldn't have been idled. Rex requires major cash, which the company doesn't have. The management team does not have the expertise to turn things around and will need additional people/workforce that do have the expertise (which they also don't have the money for). NovaDx needs cash to do any of the above and will need up to $20M for everything. Current market cap is about $11.5M. Talk about dilution! All things considered, I don't think NovaDx will be able to get the financing required. Sandstorm should not give them another penny as we already have NDX by the balls.
And that's where the bright side comes in. Due to the favourable structure of the streaming deals, we've got senior security on their assets as contractual obligations have not been fulfilled. In that case, it is up to SND management to liquidate the assets in the most profitable manner. Furthermore, any capital losses sustained will be applied against future gains. As long as the market continues to believe in Nolan, we should continue to have access to capital down the road and the coal losses will be diluted and forgotten.
I'll either add shares at new all time lows as NDX goes down the toilet or I'll be pleasantly surprised and watch the NDX coal cash roll in. Unfortunately, NDX was projected to be a huge percentage of cashflow in a few years. I'm in it for the long-term, for the management, as long as Nolan can handle the Royal Coal and potential NovaDx bankruptcies favourably. I believe Donner and Thunderbird will turn out to be great deals. Terrex... we'll see.