The following was sent to each director and the CFO and they were asked to let me know where I was wrong and I naturally got no response.
This represents the position as of December 31 2023.
It will be interesting to see the FIRST QUARTER results and COMPARE THEM TO DECEMBER 31 2023 financial position.
To the BOD and Management of Northern
I have made some assumptions based on fiscal year end 2023 as follows:
A sale price per ton of graphite $1990.00 cash costs of $1429.00 per ton contribution to operating costs of $561.00 per ton. All figures are in Canadian dollars.
The best-case scenario is to sell 25,000 tons of graphite which would contribute a total of $14,025,000 to the operation of the company (25000x$561.00).
Total expenses for the company in 2023 of $8,519,000 (source December 2023 income statement calculated total expenses of $11,414,000 minus depreciation of $2,895,000).
On the surface that looks pretty good positive cash flow of $5,506,000 ($14,025,000 minus $8,519,000).
However, referencing page 32 of the MDA December 31, 2023 Contractual Obligations the company requires $18,536,000 during fiscal 2024. The company will require additional financing of $13,030,00 ($18,536,000 page 32 MDA plus $8,519,000 cash expenses minus $14,025,000 contribution of selling 25,000 tons) to meet the current fiscal year requirements.
The $13,030,000 required assumes 25000 tons of production, which is not likely. Sales of 1000 tons contributes $561,000 of cash flow thus each 1000 tons sold less than the optimum sales of 25000 tons requires an addition of $561,000 to the required cash for fiscal 2024.
The above does not include any expenses associated with the new battery division effective February 1 of 2024. The above shortfall of cash required also does not include the increased costs associated LDI mining startup, or the planned 2024 drill campaign. These two factors alone, the Battery Materials Group and the startup mining and exploration costs, will add a significant amount in additional expenditures.