RE:RE:"Going-Concern" Problem?There is no going concern problem! For a miserable few million dollars, the company has many options - assuming they even need additional financing to see them through Caribou's pre-commerical production stage. Firstly, note that full commerical production is not far off - I would say at December month-end or January some time, if the monthly numbers are any indication. That's 6-8 weeks away. Trevali will then be producing Zn at a cash cost of 1/2 of today's Zn price at Caribou, similar to Santander, and cash flow should be positive (although not as much as if Zn were at $1). Also note that while commodity prices are weak, the strong USD lowers production costs as a good percentage of those costs are incurred in Peruvian and Canadian currency.
In any event, financing options (or cash preservation) include deferring exploration, deferring payments to vendors for a short time, obtaining bridge loans from Glencore or other key institutional investors, early advances on concentrate deliveries, possible bank financing, streaming deals for silver (which can be done very quickly), sale-leasebacks of certain major mining trucks/shovels, etc. These are all viable options, in addition to more share issuances - which we investors wouldn't want to see for the sake of more dilution. Keep in mind that if they do need more financing to get them through, it's not another $100 million, but maybe a very small fraction of that amount.
My broker tells me there were a couple of key institutional holders selling all their stock in the last few days. Some institutions can't hold penny stocks (or when certain stocks go below a set level, they have to sell no matter what), and some may be selling just because it's tax-loss selling time. If you look at Q3, Santander had a great quarter, and Caribou is ramping up nicely. The only negative was the lower mill throughput because they were making adjustments to accomodate the HIGHER-GRADE ore. Many mines would kill for the problem of having higher-grade ore. So based mainly on that hiccup, and the percieved cash shortfall to get TV to the finish line, the stock went from 60 cents to well below 30 cents in about a week. This makes little sense and the stock is clearly oversold, regardless of the Zn price.
In summary, there is no going concern problem here, although that would otherwise appear to be the case if one just looked at all the shares that have been dumped in the last few days. Hang tough - 30 million shares "bought" in the last 3 sessions. Somebody smells an huge opportunity and that was evident as the stock came back nicely today after hitting it's low.
easily get