Question for the board There appear to be a few inarticulate resident bears on this board. I had to ignore them as they offer absolutely no analysis or actual substance to back up their views. However, they raise a fair question that should not be dismissed outright.
Based on the last quarterly, the latest md&a and what was shared in the investor presentation, the company has $2M capex remaining for K2, $10M for equipment for K2 (which can be strategically added although they didn't say how much and when these costs will be incurred ), $5-$6M for GTA capex and plans to begin buildout of a facility in Australia to come online late 2021. So that's 18M total for K2/GTA plus an unknown amount for an Australia build. Anyone know how much K2 cost in total? That would give some idea of costs for an Australia facility. (I'll try and locate that in sedar).
At end of Q3, the company had plenty of working capital, $30M cash, $20M outstanding debt with access to an additional $20M revolver debt.
Having said all that, What are people's opinion that a targeted raise may be needed going into Q1?
My opinion is there's a good chance the company may do a 10M - 15M share raise by Q1, specifically for the Australia buildout. As they deplete a good portion of their cash toward K2 and GTA completion and scale up to meet demand (and hopefully improve their margins), I just do not think they will want to draw down that revolver and carry that much debt. So I believe they will do a targeted raise as long as they have excellent line of sight for Australian growth. Just wanted to share my thoughts and see what others think. BTW I'm quite long this stock so I have no bear agenda here.