RE: What exactly is holding back the SP at the mo?26 May 2024 12:25
Could eventually be a Shanta style buy out Lew who knows at the end of day, no one anticipated that one at the end of the day.
That said mitigation just means reduce the severity or impact of something, which in HUM's case can only be the balance sheet and short term liabilities, things like contractor invoices, fuel and consumables.
Coris bank are the largest regional bank so highly likely that Coris will already be providing financial services of sorts to HUM's contractors in one form or another. Mitigation could be reverse factoring for example, where the principle lender being a majority stakeholder of the project could pay invoices for HUM when they become due and charge HUM the factoring, rather than the contractor.
The other short term liabilities is the debt interest. Already addressed by DB, that there's no covenants as such on when the interest is paid. Also the maturity date of all the debt undertaken can be extended at the agreement of both parties. That said debt interest is a compounding liability the longer it takes to pay the more it costs. It is in my opinion that this talk of mitigation is referring to the cost of the debt being extended further.
That said it is a short term problem and even if we consider current production based on Q1 numbers alone then the company is break even at current pog.
Coris knows full well that the quickest way to get paid is to ramp up to operational production as soon as damn possible and I suspect so do Corica.
Also equally possible that Coris are just using their influence and cool heads to help reset a relationship, that for way or another, completely broke down.
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