Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Not sure we have enough detail to ascertain the potential value of this hence the subdued market reaction.
We are co-funding the performance enhancements but have no idea about the costings. If and when the €2.9m is available for drawdown what happens to the cash. Does it remain within the MDC, can EQT get its hands on 38% of it or something else.
Either way its a drop in the ocean compared to monthly cash burn of circa 600-700k. Any cash received will effectively go straight out the door to Riverport.
This is why the company have stated they require a Strategic Investor as its an acknowledgement that without one they are unlikely to remain a going concern.
The question is what does an SI look like ? With an £8m MC a potential suitor may as well wait to get the Tech/IP at fire sale prices along with a couple of key staff. I will be surprised if this is still a listed business in 12 months time but lets see......
At least JVL speaks coherently. DP just talks in riddles designed to confusticate; pretty much like every RNS from the company with regards to commercials.
Agree there were elements that were reassuring. However note the loose warning that any strategic investor coming on board at this stage will be at current market valuation. Be prepared for a lot of the business to be effectively given away to ensure a going concern in my opinion.
A close read of the interims and it looks pretty bleak to me.
The going concern warning as I expected. Auditors would not be singing these accounts off as a GC for sure.
Cash of only €1m but debt (mainly Riverfort) of €4.7m payable over next 18 months.
Net Asset recoverability limited. Closer inspection of the Balance Sheet shows the Net Assets are comprised of 17m goodwill being written down, development costs and further spurious investments. Auditors will be insisting these are significantly impaired at Y/E.
Admission that need a Strategic investor to survive. For me this plays out in 3 ways over the next 6-12 months:
1. Private Equity/MBO
2. Trade Sale of Tech/IP
3. Administration
Either way I fear investors will come away with little to nothing unfortunately. Moral to this story is when a Director offloads 25m shares at 1.91pm follow suit sharpish. Only took 30% off the table so live and learn.
Cash burn is unfortunately circa 800k per month. Need to factor in the monthly repayment schedule of the Riverfort debt in addition to ongoing admin expenses.
I suspect they will need to refinance this debt again to remain a going concern.
Interims should hopefully put some flesh on the bone although come with a warning as they are unaudited.
The £10m was with Riverfort and they had already drawn down the first 5m and had to refinance that - repayments were supposed to start in June for the next 18 months. There is not the remotest possibility that Riverfort will let them draw down the 2nd 5m given the state of their finances.
Pacifico is right monthly cash burn is circa 800kE given these loan repayments and admin expenses. I cannot see how they are a going concern and the interims next week, although unaudited, are going to have to either flag this or show how they can continue in existence for the next 12 months.
The Net assets are also full of hope value - stacked with goodwill, spurious investments, receivables etc so expecting further significant write downs/impairments.
I think they are right on a knifes edge at present.
Is this still a going concern given all this.
Monthly cash burn is circa 750k for at least the next 12 months so I am not sure they can be. Expecting these RNS' to be a prelude to a warning in the shortly to be published interims. Lets see......
The 0.25p LTOP may prove our saving grace here.
The BOD are set to make life changing sums of money if can get this back to 1p. Another raise at these levels will however completely scupper their chances of achieving this so at least we are aligned in this regard.
Their quandary is monthly cash burn is circa £750k for the next 18 months or so (whilst they pay off the debt and cover overhead) so can the business realistically get through this period without tapping the market once more.
A "working capital" raise ensures they continue to receive their inflated salaries for the foreseeable but effectively kills the LTOP...............their quandary
Looking back at earlier RNS and the granting of the 10 yr ML by the ministry in Feb'21 it does seem inconceivable that there is not a compromise to be found here in terms of issuing the permit.
ML granted at national level for 10 yrs with full support of the Ministry yet Region takes 2 yrs to effectively determine the area cannot be mined under any reasonable set of circumstances. ML not therefore worth the paper it's written on ?
I get circumstances can change with regards to permitting criteria but an outright "No" to permit issuance surely not ?
What happens then wrt the ML. Just say to the MA we mothball the business and sit on the licence until something changes.
ML granted at national level so perhaps it is logical that Ministerial level need to join the dots re. the permit. Almost a mediation role between EML and Regional, where regional have a slight conflict of interest. Not sure but still think outright No is unlikely but lets see
That's not correct Agricore.
They had to refinance and deferred the repayment schedule of the £5m commencing last month for the next 18 months.
This is the issue at the moment. Today clearly very good news but last time i looked at it the cash burn from June this year was circa £600k-700 p.m to cover loan repayments and overhead for the next 18 months.
Consequently every penny they can get their hands on at the moment goes straight back out the door servicing debt and paying salaries.
Until the business can prove it has a sustainable model and does not need to tap the market again near term any re-rate will be short lived imo.