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'How can we say company does not need immediately they need to pay 7 millions to Orion shortly '
Actually that appears to be true, read the bit below in the middle:
60% of the CLN Balance (US$28.3 million) will be converted into a secured term loan ("Term Loan") on the following terms:
Interest: 6.0% ("Margin") plus the greater of (I) 3-month Secured Overnight Financing Rate ("SOFR") and (ii) 3.0% per annum.
Interest payable quarterly in arrears in cash starting from the last business day of the quarter in which the closing of the transaction occurs and on the last business day of each quarter thereafter. In the event that the Company has insufficient cash available to pay interest on its due date, the interest due on that date shall continue to accrue. While there is a continuing default, the Margin will be increased by 3%.
O Principal repayments structured to:
a. 25% of the Term Loan (US$7.1 million) to be repaid by 30 June 2024.
b. 30% of the Term Loan (US$8.5 million) to be repaid by 30 June 2025.
c. 45% of the Term Loan (US$12.7 million) to be repaid by 30 June 2026.'
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Obviously it means racking up even more debt and interest though but in terms of short term survival there does appear to be wiggle room.
Thanks, I think we can all agree like you say that this management have done an excellent job of surviving up until this point and in buying themselves time - I imagine they'll attempt one more placing in 2024 and that will guarantee survival until at least the hosting agreement comes to an end.
The cost cutting that can be made pales in comparison to the lost revenue from the fall in vanadium prices - year on year (Q1 on Q1) average sales price will have reduced by about $13.5/kgV, that's $13.5m per 1000mtV produced / $54m if extrapolated out for an entire year. Craig might be able to get direct costs down further from here but spending is necessary to really reduce costs, like with the barren dam, and BMN don't have the cash to do that now. You then have significant financing costs and interest on the debt that can't simply be reduced. Of course that was Craig's plan from day one, to deleverage the balance sheet by selling off some of the assets, but so far all the financing has been eaten up by cash burn and legacy debts.
And what do you mean 'stopping production is not going to work, or even happen'? The losses per month now will be more than the $2.2m cash BMN has remaining, they won't have the funds to pay staff, suppliers etc without further funding forthcoming. It's not a tactical halting operations if it happens, it's a necessity.
Are you clued up on when their debt matures? Is any of the remaining $55.2m due within the next couple of quarters? If so that'll be the next big hurdle before the end of the year when the hosting agreement ends. I know the senior notes aren't due til 2026 but I wasn't sure about the other $15.2m.
I'm sure a while ago you said Argo's cash break even was around $35k so i'm surprised you still think $60k-$70k post halving with how much difficulty has adjusted upwards since (ignoring temporary inflated fees), I'd have thought new break even would be more more like $80k-$90k but like you say, there's no room for growth and realistically any modest cash that is generated will need to pay off what's left of the Galaxy loan.
I agree with all that, I just don't think Argo will be one of those miners that does 3X to 5X i.e £210m to £350m even with BTC over $100k. Argo won't benefit from the higher price in terms of BTC held and will lose out on the difficulty front as it increases and they fail to grow to keep up with it. Argo probably won't even be generating cash at that BTC price if fees have come back down.
There's big moves to be had with some of the heavyweight miners though, that's for sure.
When Fortune left at the end of June last year there was $3.7m cash. Since we have seen the majority of the stockpile sold, borrowed $8.1m from SPR and issued around 1B new shares for equity and BMN are back producing the same as they were before with none of the major capex projects having gone ahead, with $2.2m cash left and significant interest accruing on new Orion loans.
Issues with SPR have confounded the situation but this vanadium price is simply unsustainable for an indebted miner like BMN and beyond any CEO's ability to navigate - the most Craig can do is buy a bit more time and hope V price recovers substantially and soon.
I personally think this may be a clue of what's going on behind the scenes... they know what's happening with the dispute and it's looking positive, so they are unable to buy on the open market whilst it's so low down here and instead they act now to at least gain whilst the share price is so low.
If they know it's going in our favour and will likely be revealed soon they'd either have to buy above £1.50 a share or wait many months to see where the share price settles before setting a baseline LTIP price... and in the meantime they'd be absolutely no incentive to maximise the positive sentiment that will come with winning the dispute, quite the opposite in fact.
This way is the only way to have them aligned from day one post dispute.
You say that CLSK but bitcoin mining isn't the hyped sector it once was, the moves of yesteryear don't happen. Just look at Argo since the turn of the year, down 62% against a BTC price move of $40k to $66k. Investors are more sophisticated now, they know when a placing is coming and they back the f*** off immediately.
BTC really has to go ballistic in a very short space of time for Argo to explode imo.
Yes another fundraise coming up although it's intimated that it will be a big partner coming on board so ideally all shares will be taken up by a partner or two and perhaps the directors digging deep into their pockets. Plus some debt financing to add into the mix.
That's about the best we can hope for - if it's a bog standard placing with retail involved it'll be disappointing.
CLSK, in terms of Argo, we must be nearing the point where their rigs are starting to lose efficiency with the worst performing needing replacing? Weren't they switched on between 2020 and 2022?
The SP here has remained so artificially high, we're talking net liabilities, debt that dwarfs cash, back to burning rather than generating monthly cash (break even perhaps temporarily) and with their hosting agreement a few quarters away from ending - and still a market cap of £71m.
If only I had the cajones to short.
I get that, so right now it's more like a quartering than a halving.
Still, from everything I'm reading there is an expectation that these sky high fees will drop back in the weeks ahead and we will be at a near halving of revenue, even if difficulty tails off a bit with it.
‘Been a good post-halving so far 👍 Fees still elevated, who knows how long that lasts, not as crazy as the weekend, but still it's pretty surreal how at a quick glance if you were to look at overall rewards now, it's almost as if halving didn't happen.‘
Difficulty about to be adjusted up slightly so fees need to make up for about a 52% drop in revenue overnight. That’s not happening, not even close.
So what was the main takeaway on here from yesterday? That absolutely everyone, commenting on here, including the neg heads, think £1.38 is a ridiculously low target and will be surpassed as soon as the dispute is behind us in a few months. Well at a price of 68p today that can only be a good thing for anyone holding or buying at this level.
The market has taken yesterday's news in its stride and looks to be back on the rise - onwards and upwards!
Try this instead: https://www.brecorder.com/news/40299891
https://*************************/status/1782766077174509907
international cpo prices remain highly supportive, even if falling back a tad. if local prices continue to slowly tick up and the cashew operation gets properly off the ground from q3 onwards then there's considerable upside to be had from this lowly mcap of £6.5m.
board has shown confidence with director buys, let's hope they can pull it off!
It's easy to see gold falling and think this SP might follow but you need to give yourself a slap in the face if like me, that happens. After the recent fall POG is still $2330, at ~10000 ounces per quarter that is around $8.5m ebitda, more than 1/7th of the mcap every 3 months.
For a company that's debt free with long mine life and low cost options to grow substantially in size it's unbelievably cheap. Staggeringly cheap.
Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.