GREY:RNKLF - Post by User
Post by
CanInvestor101on Aug 27, 2019 10:19pm
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Post# 30073046
Email Tonight from Rob in IR for RNX Re: PP....
Email Tonight from Rob in IR for RNX Re: PP....
@BayStreetBagger Here is his first response - /////
Thanks for your question regarding the $18 million private placement we announced yesterday.
There are several reasons we concluded that an equity financing at this stage is the right thing to do for the business and our shareholders.
The opportunity was presented to us and was carefully considered. While it remains true that we do not presently have large capital demands over the next couple of quarters, this financing will place RNC on much firmer financial footing and reduce risks during our continued ramp-up of mining operations and the integration of Beta Hunt with the newly-acquired HGO (the Higginsville Gold Operations).
We now operate a large enterprise – for example, the HGO mill (replacement value ~A$100 million) is a large plant operation that from time to time has unplanned capital requirements. We think it is better for shareholders and the company to take the funding, providing greater flexibility to support and invest further in the business - for example by advancing drilling at Higginsville which we believe will be accretive to shareholders.
Our Australian operations employ nearly 300 highly specialized technical staff. We compete with many other mining companies. It is important we maintain a healthy balance sheet to help provide the stability to retain the best talent and to operate as safely and efficiently as possible. This is how we will build the business for our shareholders success.
A healthy balance sheet with improved levels of working capital also de-risks the business and makes less attractive to short sellers looking to profit by placing downward pressure on the share price.
Another important consideration is that this equity financing presents the opportunity to add new institutional investors into our story, which we believe will be good for the company and shareholders as RNC continues to grow and evolve as a gold producer.
Regards,
Rob //////