$RNX: Among the best Q & A at todays Q4 2018 ConferenceAmong the best Q & A IMHO of the RNC Q4 2018 Results presentation Conference between a private investor and Mark Selby, that I transcribed today:
Private investor: «Hi Mark I was wondering what the operating cash flow or free cash flow for the year and for the Q? »
Mark Selby: «Operating cash flow, so our adjusted EBITDA was 27 M$ and in terms of free cash flow for the year, I’ll get our CFO to have that information, I get most of the cash that we generated and this was used to repay debt during the year. »
Private investor: «On the Beta Hunt would you be profitable today if you were in nickel production again, because you know the price of nickel has gone up quite a bit and I saw your AISC looks like its fairly small last time you were doing it? »
Mark Selby: «Yeah, the question with respect to nickel is, again there are certain amount of development that we would require to access to some of the nickel reserves that are there. We would look again, as we move just in terms of turning on resources that we have access to development to. For us right now its just about generating some cash while we are completing the resource update. We would look at nickel as well as gold over the second quarter to bring that production into bear. »
Private investor: «Just from a technical stand point, not the financial stand point, let’s say nickel goes to 8 $ or 9 $ a pound which is possible next year, at the Beta Hunt could you go full book gold and nickel at the same time, if money aside? »
Mark Selby: «Could we mine both the gold and the nickel at Beta Hunt cash aside? They are two geologically distinct sets of ore bodies so the access to those things are both discrete elements and so other than the final haulage of the main ramp. There are two separate ore bodies as we had in our PEA, we were mining in that PEA significant quantities of gold and nickel at the same time. So, if it makes financial sense to do so it will be considered in the future. »
Private investor: «On your HGO deal sounds like 10 M USD savings on that, sounds like you have the best recovery from your mills from that particular mill that you’re probably going to acquire. It also sounds like the AISC of their existing mine that they have […] you could even make another 10 M USD just from mining what you are acquiring. That potential 20 M USD cash flow or equivalent cash flow off that. Would it be possible to finance that from debt instead of selling stock to do that? »
Mark Selby: «The calculations that you’ve done there, that is factoring in to our thinking as well in terms of raising the capital. We raised a portion of the capital that we needed to fund the transaction that we announced yesterday but the remaining balance of it. Those kinds of metrics that you discussed do provide the opportunity to use a full range of other financing alternatives in addition to equity and again as I have a substantial amount of my net worth as a shareholder in this company… »
Private investor: «Sounds very exciting, it has a lot of future potential and land package that you already have, the whole Western Australian operation sounds very exciting, look forward to what you have to report for the rest of the year and thank you for your answers. »
Mark Selby: «Thank you for the questions, much appreciated. »