ADME cash position13 Sep 2019 09:28
let's revisit ADME cash position,
starting point from last results:
£216,000 cash balance at 31/12/2018
£680,000 gross from placing april '19.
(let's assume the costs for that were
about £80,000, hence £600,000 net.)
£72,000 in from warrant exercise in june
£500,000 gross from placing in august '19,
(let's assume £50K cost, hence £450K net.)
£5,000 in from warrant exercise in august.
that gives total cash before admin costs = £1,343,000
2018 admin expenses were £1,620,000. (ADME said it
had reduced operating costs, but not admin expenses.)
--> seems still burning **£135,000 per month** on 'admin'.
so since december 2018, £1,343,000 cash
balances. but spending £135,000 / month.
-> that meant they were going to run out of cash end october '19.
unless they'd severely cut admin costs, or unless they did a placing.
and then, lo and behold a placing for £832,000.
(let's assume shareholders won't block it, if
they do then company is just brown bread.)
let's assume 10% costs for the placing, gives
them a net cash influx of circa £750K. unless
admin costs are cut significantly, that funds
them to keep paying BoD wages etc for another
five and half months, i.e. until *mid April 2020*.
however, that assumes firstly that they don't actually
spend any of the money on assets, nor on purchasing
options to buy prospective assets, and it also assumes
that they don't get asked to pay back the grenada cash
in the near future. similarly, they still do not have cash
to pay for their share of possible aje developments, (if/
/when partners ever agree on a plan) as this fundraise is
needed for BoD wages & admin costs over next 5-6 months.
so i think they might spend some of the placing cash on
buying an option on some african asset which is not yet
doing any significant *production*, & then try to use that
news plus associated spin that this is an asset that they
intend to 'evaluate' which they think has terrific 'potential',
in order to invigorate the share price so that they can then
get a larger placing done (bear in mind that all that could
happen before the results of 'evaluation' known...) & then
in turn they could use the next placing cash to buy options
to evaluate yet more assets with 'potential'. if they can get
enough plates spinning, that could keep the BoD in big
wages through repeated placements even *if* very sadly
none of those assets ever do turn out to be worth much.
ajmo.
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