Last week6 Feb 2023 05:57
It's a long time since I posted on an LSE board, but after last week, when I was at one point 50k down, I want to say this: Watching the price action in relation to the trades, the drop was clearly engineered. It is regrettable that the announcement was made during trading, if it had been made after close, there would have been time for people to read the prospectus properly and see how things will move forwards. And bear in mind that all the dates in the prospectus for targets could be brought forward a long way when the JV is in place. So it seems that the drop was blamed on the going concern statement accompanying the prospectus, even though is is a standard type of disclaimer. Indeed, in the last accounts, published on 31st March last year, there was a very similar one, applying to the company's position at the end of 2001. And 13 months later, we have not gone bust, we have raised money as required, and moved a long way forward, now on the cusp of something big. I am confident that the company can easily raise funds to cover any shortfall pre new borrowing and pre JV. The funds raised in the last year we done before we were ever told, the announcement was after it was done, seemingly easily. Here is page 9/10 from the last accounts, 13 months old:
'Going Concern
The Financial Statements are prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Currently, the Company does not have adequate financing to develop its operations and the Company is pursuing exploration projects and contracts that will require substantial additional financing before they are able to generate positive operating cash flows. Furthermore, as at December 31, 2021 the Company was in default on its senior credit facility as disclosed in note 14 for: (i) failure to meet a liquidity covenant due mainly to an uncollected joint interest receivable from a partner that is in receivership (see note 23b); and (ii) failure to notify the Lender of material events involving the joint interest partner in receivership. Subsequent to December 31, 2021, the Company received a waiver from its lender with respect to the defaults and accordingly has become subject to the terms of the original senior credit facility dated March 16, 2021. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be obtained on terms acceptable to the Company. The Company currently does not have sufficient working capital and cash flows to cover forecasted operating and capital expenditures for the next 12 months. With no assurance that additional financing will be obtained there is material uncertainty that casts significant doubt on the Company's ability to continue as a going concern. '
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