Willy has done what he does best.He has caused panick on the board again. Here we go with another round of discussion on a placement to bail out a company that does not need bailing. Have a look at the financials and the agreement between the lenders and MPVD.
At the end of June we had $11.866 million Can in the bank and restricted cash reserves of $89.504 Can in the bank . According to the agreement in September we are allowed to use the restricted cash to fund the restricted cash call reserves. At an exchange rate of .80 cents US that is $9.492 US plus $71.603 US for a total of $81.095 million US . WE also had a 6th sale generating an additional $20.9 million dollars after June in the July sale . We have just completed the September sale which should generate at least another 22 million . We have two more sales October and November that should at leaset generate the same amount. Based on the revised production targets we get a minimum of 315,000 carats per sale to meet the target,. at $70 US per carat . That is a total revenue of $168,145,000 US . We need 128,000.000 to meet all the cash calls to the end of November. We have an additional sale in December for an additional 22 million based on the above figures. Do they have sufficient cash flow ? YES . Will we need a placement ? NO .
We do have the remaining 50 million reserves to fund by December 31st. and I believe we will have enough funds. Remember I used 70 us per cart as an average . It will be higher.
Another note they call for a cash reserve of 43 million to cover the sunk costs including interest The actual payment is not required until September 1st 2018.
If we don't need the extra 13 millions in funding from the facility why use it and pay interest for nothing?