OTCPK:FRSAF - Post by User
Comment by
Zinc_Headon Jun 13, 2012 3:22pm
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Post# 20009863
RE: creditors ar anxious
RE: creditors ar anxious I tend to agree with this statement because you need to look at 4 things. The burn rate vs current cash position vs interest payment vs gold production.
The current burn rate is well over 2 million and I am sure the current cash is below a million and the interest payment due to Waterton by years end will be a huge over hang. The "expected production" is now down to 20,000 ounces from the 50,000 ounces they were promoting for the last 3 years.
The math is pretty simple wouldnt you say?
4 million bucks will not last them even 2 months? Whats to say they even close 4 million dollars? Once somebody with half a brain runs the numbers vs costs they will be lucky to get even half of that? then the life line is down to a month and a half.
Business 101
When your costs are greater than your sales the company will not succeed. I dont see FAU surviving passed the new year unless management makes some drastic changes or they start liquidating the infrastructure and chalking this up to experience. I dont fault the company for trying to make it work because in a better market they wouldnt be under the microscope as much.
M