RE:near term production > near production is pipe dream
> awful balance sheet
The question keeps coming back to Dufferin’s potential if it had a capable team with cash.
Consider a merger of RCG and ANX. Let’s say for sake of argument all mining efforts are directed to Dufferin. All other mining at ANX and RCG are put on hold for a few years in this back of the envelope exercise.
In this exercise, ANX’s liabilities become added dead weight to RCG’s liabilities in the combined company with only Dufferin pulling the freight.
I assume that Dufferin starts in year 0 of the PEA with 6 months of ramp up.
Below the CCF of each year are tacked onto the shareholder equity.
RCG Sept 2018 (year -1)
balance sheet $32.9
liabilities $20.0
shareholder equity $12.9M
ANX Dec 2018 (year -1)
balance sheet $57.9
liabilities $14.9
shareholder equity $43.0M
RCG+ANX combined (year -1)
balance sheet $90.8
liabilities $34.9
shareholder equity $55.9M
Dufferin CCF from the PEA
year 0 ($9.848M)
year 1 $10.715M
year 2 $13.195M
Tax-loss credits used (based on PEA numbers)
year 0 $0.871M
year 1 $3.554M
year 2 $4.201M
cash added above shareholder equity
year - 2018 0
year 0 2019 ($9.0M)
year 1 2020 $5.3M
year 2 2021 $22.7M
year 3 2022 $34.8M **
shareholder equity (CCF + tax loss credits)
year - 2018 $55.9M
year 0 2019 $46.9M
year 1 2020 $52.2M
year 2 2021 $74.9M
year 3 2022 $109.7M **
** With pre-tax NPV of $121M over a 10 year project each additional year, eg year 3, will bring in approximately CCF $12.1M
By the end of year 3 there will be $34.8M of cash added to the current shareholder equity.
Sufficient to cover the combined liabilities of $34.9M as of Dec 2018.
Again, this just to put some colour on Dufferin's NPV numbers which are similar to Goldboro's NPV numbers.
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Notes:
All the numbers can be found on pg 207 of the PEA available on SEDAR.
CCF is cumulative cash flow