They are clearly expecting all finance to be sorted 4-6 months before the BFS is due between April and June next year.
"The Company is in advanced discussions with a number of lenders to finance the construction of the Manica project and the Board expects to receive firm proposals in this regard within the next three months."
Will a minnow be able to raise 70, 80, 90% finance for a project during a slump in the resource sector without a BFS or is this just more rhetoric from the king of spin? Interesting to see if this is another missed target or whether they can pull it off and what caveats might be placed on any provisional offers of finance pre or post BFS.
Good Morning I think there is still a lot of confidence to be recovered here owing to the latest profit figures. Once the assets comes under XTR ownership and funding is revealed this should see the SP a lot higher. I know it's stating the obvious but I can't find any other way to look at this presently Only my opinion though Bumchin
Very true Robinhood, quite why we are at such a small market cap considering our Chepica Mine is profit making ($150k last quarter) and soon to be making in excess of $1.2 million per quarter come early 2016.
Manica will soon come online increasing gold production well above 50koz within the next 16 months and copper dumps that have a good value vs costs.
Add in an increase in our commodity prices as we write all bodes well for those holding here, the markets will not be able to hold the price back soon enough, patience is key as we will all be rewarded handsomely in a short period of time.
Good points, but as Jan says Manica deal will pay itself off in 6 months, so 18 months max. There is 10M oz of recoverable gold in the 27KM strike zone to the south. 12KM of strike zone to the north and a full blown copper belt running north south across the whole licence to the west. This is where 70% company value is. Manica will surprise those who do no reserach. PS. Why the doom and gloom on $300M of copper insitu ? Loan deal with local bank was always stated as being sort. Job done. Case of hold and ignore the poop that is posted.
A cap and collar type agreement would be certainly look more favourable, I am sure Jan is aware of any dangers that might arise, protecting our business in any foreseeable event, history is kind on future borrowers.
From the revised terms RNS on 10/09/15 Jan stated the comments below, from that I can only assume that whomever they are in negotiations with, there's more than one for sure, they are looking to raise the full amount and some to cover acquisition costs of $1 million. That is how I understand information, it would imply a bank or some institution is willing to lend at full development cost.
Whilst that might be a little unusual, perhaps given Jan's past experience (Banks certainly like a BoD with proven track record) and banks need to loan money to small/medium businesses they have opportunity to pull of something quite out the ordinary?
RNS:- "In addition to fixing the number of shares to be issued, the new terms will also allow us to conserve cash resources by the funding of a proportion of the cash consideration through project finance which is currently being negotiated." "The Company is in advanced discussions with a number of lenders to finance the construction of the Manica project and the Board expects to receive firm proposals in this regard within the next three months."
Bolgas, Just on the data from the PEA alone I would be comfortable enough to suggest project finance should be a formality. Given the recent focus back into gold, lenders should be looking more favourably at these types of investable assets. The question will be what type of finance will the company be offered or pursue. Simple 70 to 80% finance across 3 years is quite a simple project finance to arrange. There are a number of other options available though, one of them could be a off take agreement with a bank. These type of project finances are good for a low cash production company, but they come with some inherent risks. I remember being invested in a gold company a few years ago that sold a percentage of its gold back to Macquarie Bank for a loan of $100m. On paper the facility looked very good, the company had to return gold to the bank at a fixed gold price of $1200, that was fine when the company cash costs were $850. But as production dropped from estimates, the cash cost went to $1300, which meant every ounce the company sold to the bank, it lost $100 oz. The bank also had a cash restrictions on a percentage of the loan, so the bank had some cash equity to fall back on. I bet the CEO there wished he had hedged the position. Many advantages and disadvantages on various finance packages, as long as the CEO has been prudent in thier approach, they can work well. I expect the company already know whats on offer.
On 20 May 2015, the Company announced that it had renegotiated improved terms which resulted in a discount of 19% on total acquisition costs of the O'Kiep Project. The final payment of US$2.5 million which was due to be paid on the commencement of mining operations will now be settled by the issue of 491,939,159 new Ordinary shares to be allotted and issued by no later than 30 June 2015.
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