RE: MD&A12 May 2018 01:45
I was looking at the financial statements over the last nine months, to try to make sense of the numbers. Just my two pence: the SRK budget estimate was for a spend of 86.5m AUD for 122km drilling, over 15 months (Sept 17-Dec 18).
This budget took everything into account including actual drill contracts for ex. (Page 135-37 of prospectus)
So far this year, last nine months spending is:
Cash expenditure (before financing activities) for the nine months ended 31 March 2018 was A$59,955,796 (2017: A$17,487,142). Out of this AUD 54.9m is mentioned as �exploration expenditure�. There appear to be big variations in the expenditure in each quarter, over the last nine months, and therefore I doubt this last quarters expenditure can be considered �the average�, ie to extrapolate to the next quarter. I wondered if this big increase (nearly 29m AUD in last quarter vs 26m in previous two quarters ie July-Dec) is due to additional drilling rigs, but the drilling had expanded in Oct itself ie previous quarter. Are there annual �cyclical� costs that accrue at year end, or payments to drillers at March end for ex, I don�t know. If the costs have risen steeply in this quarter due to the additional drilling, then yes, we are getting through the money at a furious pace, and further cash is needed this year. But there have been repeated statements that there will be no further raisings until 2019. Could these two seemingly contradictory statements reconcile? Yes, if you consider the maxit/employee etc options for nearly 42m shares at .14/.28 p, which expire within six months. I believe these will get cashed anyways. These could bridge the gap till Feb 2019, when the next set of options become open ie 60p ones.
I believe that the costs were budgeted, and these last quarter figures must have some reasons to be higher than the quarters surrounding them. Someone here could ask the company to explain the anomaly a bit. We have only to wait till July to find out about March-June quarter anyways. Why would SRK budget at USD65m if it wasn�t achievable? And would NM state they are on plan? Would they tell shareholders theres no need to raise till 2019? Here trust, instinct and judgement comes into the picture, and I m afraid each of us is on his own, managing their own risk and money. Personally, I haven�t any doubts we are within budget, NM runs a tight ship. Even looking at the expenses numbers for ex (includes the travel, advertising etc which some were bashing as ? Exorbitant/unnecessary) demonstrates that expenses have stayed SAME as comparable period in 2017.
What of the other gold nuggets in the RNS, which are exciting? Permissions obtained from govt and land holders to proceed with exploration/auger drilling, further exploration planned on several of the new prospects. And 71% of land package screened. Just my two pence. Please DYOR, make your own decisions. Good luck all
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