RE: Newbie29 Mar 2024 15:05
If you believe the chartists this could drop to 0.87p and then consolidate; what that ignores is the possibility of a raise in coming weeks or months. EWT due in Q3 (not specified when) and anticipate that they will need to raise money in advance of that and another appraisal well. How much? Various estimates from £zero (grossly optimistic in my view) to £8m. Though they might rent out the drill in the intervening period which could, conceivably, fund the EWT but not the subsequent appraisal well.
There is the possibility though that in the coming weeks and before any raise the BoD will release the results of their basin modelling and a revised resource estimates. On the assumption that these are positive we could see the sp rise considerably (my view), though some consider that this is unlikely to do much without the results of the EWT - as it is the EWT and possibly the subsequent appraisal well results that will determine whether Itumbula is a "commercial discovery" and that the basin modelling and resource estimates, on their own, will not do much. I think that the EWT will simply corroborate the model and resource estimates not determine them, so these could be pivotal.
It will need the basin modelling and resource estimates to allow the BoD to determine the future work programme, so until they have that information, logically, they do not know how much they need to raise and hence the raise will come after this is complete. There is the risk though that the BoD will announce the resource estimates alongside a raise and the market and shareholders will not get to see those figures until he funding partners have already jumped in.
If we manage to confirm a commercial find the company then have the minor (NOT) hurdle of finding $50 - 100m to fund a production facility but have already stated that they have been in preliminary discussion with JV and offtake partners to fund or part fund this. Though of course this is all contingent on that commercial discovery being announced post EWT and maybe the subsequent appraisal well drill.
Hope that helps. Oters will have a different perspective on this of course but this is my view and is as dispassionate and balanced a view as I can offer.
I DO however think that the risk - reward ratio is tremendously in it's favour - and that is with and without a raise; I have got money on the side to take advantage of a dilution if there is one but still have a sizeable involvement because, if the basin modelling and resource estimates are as I hope, then this could fly in front of any raise. (In my opinion of course!).
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