Stop talking crap about cash!8 Apr 2020 12:05
Cash running out in a year, one of the best this morning. The accounts say different! Before I use any figures they have stated normal operating conditions they have enough cash for AT LEAST 1 year (this is standard practice to say to confirm you will not raise money in this financial year at least). They further said they had operating cash on a tightened budget to last 2 YEARS!.
So what are people badly speculating the cash position for? Secondly previous year spend is not a sign of future spend, if you actually looked at what was achieved in the year you could justify that spend and see those things are not happening this year.
6.5 Opening balance
-2.4 operating activities (base costs inc payroll)
-4.12 investing activities (Purchase of exploration and evaluation assets plus property, plant and equipment)
18.24 Orion (was 19m but cost 1.2m in fees)
18.22
-0.482 (exchange rate loss - a swing of 500k from previous year - swings and roundabouts, but cheaper to buy in Brazil now)
17.738 equals guess what circ our cash balance
So it has been easy to say 19m instead of 18m for Orion because you didn't consider fees, 0.5 swing in forex, could swing back again to a +ve next year. Consistent 4mill spent on - Purchase of exploration and evaluation assets plus property, plant and equipment..... Given were we are now do we have much to purchase this year? I would think not. In fact other than progressing the finance I don't see a list like last year of achievements that had to paid for (brackets this year)
Vermelho Pre-Feasibility Study - (FS put on hold until partners are sourced)
Significant new Nickel Resource at Serra do Tapa - (work stream ended for that)
Power Utilisation Permit Awarded for Araguaia - (still some engineering studies but on hold no doubt due to the virus)
CSR - (we will continue to spend a small amount on the locals)
High Purity Cobalt & Nickel Sulphate From Vermelho (no testing of ore now)
Positive Metallurgical Testwork For Vermelho (no met work happening now)
So overall some CSR continuing, some engineering for the power line access (can't imagine that is more than a few people under contract and well advanced), salary at 2.4m, not sure how much more investing we need to do in the projects, we have all rights and permits pretty much needed for now, biggest unknown is the development of the mine team but it is forward progression that we need to spend on regardless.
So total cash spent last year circ 7m, we know 2.4m is likely, but don't see the big purchases of exploration and evaluation asset costs given the work streams carried out last year and their conclusion. We already know the mine progression work will and must happen.
Worst case 7m well shoot me down if that does not go into 17.6m at least 2 times! Or 2 years.
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