A reminder...................... Just a little reminder.......
Which means of course.......all development costs for Coho, Chinook, Cascadura can be covered by borrowing more (and the facility is up to 50 million - currently only 20 million and only 15m of 20m borrowed)
Once Coho is on line later this year......Royston in 2021 will be paid for from operating cash flow........
Read the quotes below from Paul....... !!!
https://tinyurl.com/y49slof3 Paul Baay said the firm has enough financial firepower to finish drilling Chinook-1 – the hotly-anticipated, third well on its hugely prospective Ortoire exploration block that spudded earlier this week.
What’s more, he said the firm will have enough funds to follow up with a fourth well called Cascadura Deep later this year.
With a current cash balance of US$11 million, boosted by a recent US$2.8 million VAT repayment and US $9 million placing, Baay added that no plans are in place for Touchstone to raise money in the foreseeable future.
“It makes no sense to dilute investors through an equity placing,” he said. “Not when we already have the cash to complete this work ourselves.”
................
Should Touchstone repeat the success of its first two wells at either of these opportunities, then Baay is once again highly confident that equity investors will not bear the brunt of development costs.
This comes down tothe firm’s recent closure of a seven-year, US$20 million term with Republic Bank – one of the Caribbean’s leading financial institutions.
Touchstone has already withdrawn US$15 million to satisfy obligations relating to its previous US$20 million credit facility with a Canadian lender from which it has now switched.
But Baay sees the relationship with Republic as a much more long-term arrangement that will open up increasingly as Touchstone grows, providing headroom that other explorers can only dream of:
“This is a real bank – there are no sweeteners, no warrants, no royalties, and no covenants until 2023. Republic is capable of lending up to US$50 million without syndication, so this means we can go back to them as we grow and make more discoveries on Ortoire, and they can grow with us.
It’s a super simple story right now; we’re going to drill the next two exploration wells, and away we go.”
The case for a material fundamental re-rate from Touchstone’s current market cap is clear.