RE: Simply Wall Street's take on cash burn25 Nov 2023 14:12
LW When you say "Which we know is incorrect, because in September 2023, the company raised $7.9 million?". Do we know it's it's incorrect? I don't believe it is.
What account are you taking of the reason for that raise?
To me the article appears to be saying it is good for 17 months based on that 9.6m and last years spend. That makes complete sense to me if they weren't carrying out drilling operations, so I wonder why you are questioning it?
To me, it appears neither they or you are not taking into account that...
One. A rig was purchased and maybe is being paid from this years accounts?
Two. The raise was made to cover two drills and also allow for a further six months operations as stated at the time. (I am 99% sure contingency funds for breakdowns would have been accounted for in that raise.)
3. An additional £600k was raised at that time which was over and above the required funding needed for the above.
The company have ordered long lead items to re-enter Tai3. Ordered a new rough neck and hydraulics system parts (someone's research stated around £100k). They have built a second pad at Itumbula, the rig is currently being mobilised the few miles to the pad if not already complete and it's possible they could spud between 3rd and 10th December with an outside chance if later this week. My view is the extra £600k would have covered these cost overruns.
While I accept there will likely be a raise at some point in the future, do you seriously think they are in desperate need to get one off now, having already committed to the work program and invoices raised? Imo they wouldn't commit to spending all that without having enough cash in place to cover it?
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