RE: teccc26 Sep 2022 23:43
Rmm update cu under 7000 not good
GOING CONCERN
The Group incurred a net loss before tax of $9.6 million for the six months ended 30 June 2022 (2021: $4.8 million). As at 30 June 2022, the Group had net current liabilities of $20.0 million (December 2021: $8.8 million). As set out in the commentary, the Company is able to produce saleable Copper with a positive operational margin. It is therefore evident that the operation has moved away from the requirement of funding to sustain daily operational activities on the mine and is able to service monthly operational cost as incurred, although supply restrictions resulting from our high level of net current liabilities can impact operational performance on a daily basis, in addition the operating margin is dependent on the Cu price which at the time of this release is at a 21 month low.
The balance sheet at December 2021 had net current liabilities of $8.8m which increased to $20.0m at 30 June 2022. A material amount of development has been carried out not only in the period under review but also in the 12-months preceding that which has now resulted in the operation producing some operational cash flow, although this is insufficient to service the working capital requirements. The development of the mine and the losses in the first quarter were only partially funded from new equity and the purchase and sale of the gold stream. The shortfall has resulted in an increase in accounts payable. In addition, debt repayments have now become current.
The balance sheet requires restructuring to support the operations by accelerating repayment of legacy commitments made during the intense Covid period and bringing operational accounts payable balances back to current terms. In addition, rescheduling of the repayment of debt to match Rambler's operational cash flow generation and further capital expenditures to create further efficiencies is required.
Managing cashflow constraints are impacting the mining schedule and therefore resolution of legacy commitments is an immediate priority. Following a review of the latest Group working capital forecasts, the Group needs to raise funds to materially reduce the current creditor position in the short term and for general working capital in the next 12 months through an issue of new equity and restructuring of debt. The forecasts assume that agreement can be reached with NewGen to defer capital payments into 2023. However, whilst the Company is engaged in discussions with NewGen, there can be no certainty that NewGen will agree to defer or reschedule the repayment of its loan, or in the event that the loan is deferred and payments are rescheduled, the terms on which the revised loan will be secured.
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