RE:RE:Dougherty I saw the comments on running not walking away from troubled projects and felt that those statements required a rebuttal.
Firstly, it is important to acknowledge that whatever the motivation, every thoughful investor should reflect on what was stated. Having said that, I listened to the conference call on the cost overruns. The cost overruns are egregious but at this point with half the capital already spent is a moot point. The question is can they complete the project based on the projections that the company put out in their conference call.
The situation leading to bankruptcy is a non-starter because the company, at this point, is net debt free and cash flow positive. So even if they were to stop all activities at Magino, AR will continue as a going concern.
AR has made the conscious decision to keep to its time table as opposed to delaying the project and possibly keeping costs down. This tells me that the people in charge looked at the project and said that it is better to pay more and get it done on time than to delay it and possibly save some money. This was their decision in spite of the fact that by delaying the project another year, the company at these gold prices would have generated an additional $100m plus in cash flow and possibly AR would not have required outside financing.
So if the company believes that the present course is the correct course of action, the additional financing is either not going to be difficult to raise or will not be raised at ridiculous terms like what was suggested on this thread (10% coupon rate and convertible at 75% of the current price).
The fact that nothing has been announced yet leads me to believe that the company is not in crisis mode and therefore willing to shop for the best deal for all shareholders.
Make your own informed investment decision.
GLTA