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I haven't looked in for a while but I am a bit shocked that the cost of building the Tulu Kapi mine has balooned to $390million!
I remember the feasibility study in 2015 put the cost at $120million this then increased to $160million in 2017 although this allowed for an increase in capacity of the plant.
Are people really willing to invest such a large (& inflared) sum to build a mine in such a risky jurisdiction or are the directors merely stringing everyone along to keep the company afloat and thrm in a job?
Hummingbird just completed the building of a gold mine in Africa which will produce up to 140,000 oz per annum and it cost $115million. Admittedly Hummingbird was lucky in that it got a fixed price for building the mine a couple of years ago before inflation took off.
The results were only for rock chip samples so don't get carried away!
Look at ORR for example, at similar market cap, which has had similar results at over 130g/t and has already had success with the drill bit
The final accounts last year were distorted by the sale of Assynt. The underlying business makes a significant loss. If you analyse the more recent interim accounts released on 8 December 2022 it is evident that Falanx is likely to run out of cash by now
The cashflow statement shows the company burnt through £1,527,575 in the 6 months to 30 September 2022. That's an annual cash burn rate if over £3million. The last disclosed cash balance was £1.96million on 30 September 2022. It's been a year since that so the company will clearly be out of cash by now. This is obviously why the company is delaying the release of its accounts
People obviously worried about holding shares whilst suspended.
I doubt they will be in a hurry to release the accounts as they will likely show the company doesn't have enough cash to continue trading and service the debt and the accountants won't sign off on the audit. It's a big gamble on whether there is any real interest in buying the business and if so whether shareholders will see any of the proceeds after the creditors are paid off
Just making stuff up as you go along to try and pump up the share price
ECSC was around £6 million annual revenue and got bought out for £5.4million so nothing like 2 or 3 times revenue
Falanx has high cash burn so it would be lucky to get 1 x revenue especially as it is out of cash so in a weak bargaining position and has £2.5million debt at a 11% interest rate that it may be struggling to service
There's a chance the company could go into administration after the shares are suspended if there is no sale of the business. It's unlikely the company could get a placing away given the history. Some people are saying the recent RNS was orchestrated in a way to let the larger shareholders exit. It's worth bearing this in mind if you're tempted to buy in before the shares are suspended
I suggest you have a careful read of the last accounts that were published. The cashflow statement shows the company burnt through £1,527,575 in the 6 months to 30 September 2022. That's an annual cash burn rate if over £3million. How much is a company worth that isn't growing and is burning through cash at a rate of £3million per annum and that also has debt of £2.5million plus 11% interest?
The business isn't even growing which is unusual for a small company in this sector. They say there was 9% revenue growth but obviously that just accounts for inflation not actual real growth in the company's business
I did more research. It was hard to find the old RNSs because the company changed its name. I went through the accounts over the weekend to ascertain the rate of cashburn which shows the company will have used up its cash around now after the last reported cash position which was at the end of September 2022. I was a bit shocked to see how quickly the cyber security company burns through cash!!!!
Assynt wasn't a shell business. It provided strategic intelligence mainly to large companies.
It was the division that actually made a profit, whilst the cyber security division has always been a big cash burner. Alk the funds from the Assynt sale have already been burnt by the unprofitable cyber division plus it also had to borrow £2.5million that needs to be repaid. Shareholders didn't see a penny from the sale
I'd be surprised if anyone was willing to pay £1 fir a share that is about to bec suspended as that would suggest an enterprise value of nearly £8million so where would be the upside from that plus there's the risk the shares could be worthless if a sale doesn't proceed
Last report of cash holding was announced on 30 September 2022 and if you look at the accounts the company is very likely to have burned through all its cash by now so that's probably why it is going to be suspended. The company may not have been able to raise fresh funds so it put itself up for sale. Even if a sale goes ahead there is a large amount of loans and interest that has to be paid off so may not be much left over after that
It may not be easy to get a quote to sell later in the week as Friday is the last trading day before it's suspended. I doubt the market makers will won't to have any stock on their books whilst it is suspended
MYX is definitely one to tuck away. Good chance the company will be a takeover target
Sorry for the garbled message as I'm in a bit of a hurry this morning but I think you get my drift
One think that is puzzling me about yesterday's announcement is why a potential sale of the cyber security business means the audited accounts on time. They have already had 6 months to do the work and it can't be a very complicated audit. I don't see why a potential sale means the accounts have to be delayed. Anyone checked with the company on this or have relevant professional knowledge?
The CEO is a wealthy man and has sold tech businesses in the past. He owns over 3% of Falanx and I'm confident he wouldn't sell the business unless its a really good deal for the company
Falanx sold Assynt, the non-core business, for £4.6million so I'd expect them to get at least tht for the main cyber security business