GREY:VITFF - Post by User
Comment by
MVargason Aug 30, 2022 9:42pm
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Post# 34931316
RE:What's that?
RE:What's that?Human7 wrote: Banyan holding steady so far today, while VGCX currently losing almost 4%. Why is it again that BYN is the wrong investment for VGCX? Is there any logic beyond "I didn't invest in Banyan, I invested in Victoria."?
Speaking only for myself, it is not just that BYN is the wrong investment for VGCX, but investment in any junior gold company is the wrong investment for VGCX at this time.
Victoria has a considerable and growing debt because it needs cash for capital improvements. In the first 6 months of this year Victoria incurred $59.1 million in capital expenditures and balance sheet debt increased by $17.5 million. You can't count on gold quickly reversing course and going back above $2,000/oz anytime soon. Victoria is learning to conserve its cash and have extended its Revolving Credit Facility from $100 million to $125 million and has also negotiated extending the maturity date to December 2024. At current gold prices it was never going to pay off all of the debt by the end of next year.
Besides, Victoria doesn't need Banyan; it has its own prospective exploration properties that it can develop after debt is paid off. It will take a very long time to receive a return on its investment in Banyan unless someone else buys the company.