A small reminder10 Oct 2023 08:50
Its easy to forget some of the detail of the official RNS statements and simply remember or selectively chose to remember the headlines. Yes there have been 2 raises:
July 13th £351K - reason - quote -The proceeds of the Subscription shall be used to fund the transactional costs for the Kilimapesa expansion funding currently being finalised.
Sept 29th - £92,750 - reason - quote - The proceeds will be used to advance our the Kilimapesa expansion funding process and general working capital requirements. The Caracal team continue to advance the Kilimapesa expansion funding process, the Joint Venture for the development of the Tanzania project and the approval of the prospectus by the FCA. We look forward to being able to announce the completion in due course".
The terms of the 2 raises to HNW's are the same. Why 2 raises - maybe it was offered by HNW's who see future value in the grants? The fact is we don't know but I the company going to say no if it was offered? Of course not. So we can all make up scenarios to suit our point of view - that's easy but doesn't make any of them factual - just a possibility.
So what can we read into this? Yes there is an element of the second tranche that has been used for working capital purposes but it would appear on the face of it that the majority of the money raised is being used to fund the associated costs in raising funds. I can only imagine the small army of external consultants / advisers / lawyers and the associated costs. These costs are not business as usual overheads or processing costs - they are one offs. I assume a hefty legal bill continues to be paid on work associated with the prospectus - costs incurred which at the moment are not generating income - YET! We also know the company has been hit with down time as a result of maintenance issues - that will have created an impact on cashflow and this company is working to an incredibly lean budget at the moment.
So to my mind, to leap to the conclusion that the company might soon have to do a large raise at a minuscule SP is naive in the extreme and ignoring the bigger picture and hopefully the near term inflow from funding.
Finally please also remember that we now have a very experienced Chairman at the helm. We have an old bull and new bull team in place (I have knowingly created an opportunity for some wags here to mention what a load of bull!) and I believe that between them, they are going to deliver the funding and 2024 is going to be a very different and positive year. Time will tell. Just my opinion.
ATB
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