RE: Joebob1 Sep 2019 20:49
Langtro, ultimately, it is the viability of each individual's shareholding I would question.
Like I said, Black rock are sorted, they get their pound of flesh either way.
The mine and workers (especially management) should be fine. Some down time while prices strengthen or, in the worst case, should wres loose the asset and another buyer is found, perhaps.
But, with the plant nearing completion, the deposit will be mined. It's just a matter of who will mine it economically. (Great returns to be had picking up distressed mines from time to time. Why pay top dollar for plant when your mates in the finance game are lining up assets for you?)
Metallurgy, processing, recovery, commodity price and interest rates are the main concern. The first 3 are always a concern until a few months into solid run rates. Anyone who makes reference to mastermans guided costs as a retort to this is living in cloud cuckoo land.
Knee - higher Sp? Is it not 30-40% off it's recent peak? Normally it's a mixture of equity and finance. 30%-70%. Gives the financiers some skin in the game. Black rock took f all equity. It's no good to them. 14% interest and a charge on all the companies assets. Yessir.
Equity raises depend on the market cap and the no of shares in issue. Very easy to wipe out shareholders if money raised at low prices. Play around with some maths there and see for yourself. You can only issue a certain numbers of shares each year. To raise a large sum via a placing, an egm and shareholder approval would be needed.
Incidentally, I've seen Sprott finance a mine on a questionable DFS, at 8%. Wres pay 14%. That sprott financed mine, construction was halted about 2 years ago and they still haven't recommended. A small equity raise paid back the few quid they spent and owed to sprott.
Just note the difference in interest rates. That tells a story in and of itself
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