RE: Good Entry10 Jun 2021 15:47
“Raise before results its the only way the juniors know”
For sure that is often the case and makes complete sense as it’s a shared risk reward for both parties. Not so sure they will get away with that with Poly though. Seat on BoD and 22.5% holding. “We need cash?” .... “yeah no problem, what you got!”.... Mmmm I can see how that would go. BUT with a seat on BoD I don’t know if they get a nod on results before the market and then the raise. I wouldn’t rule that out!
However, Poly are here for the VMS results and to develop a mine. They would obviously want data, numbers hard currency and with this being their first such venture, taking a stake in another company, I am sure they’d want to play by the book to develop a resource on their doorstep.
CHF raised £2.5m in Dec on top of the £2.5m (Poly + Raise) in Nov so we we’re pretty cashed up for drill and acquisition(s). At the Sept interims there was only £316k cash so it was pretty obvious a raise was needed.
There are a couple of key SP points. 9p Poly raise, +9p director buys. 10- 14p ish Labrador deal depending on taking in full dilution, note this was all equity, not cash, and then the 20p warrants (with accelerator) which will provide more cash to CHF.
The cash spend in Labrador is not onerous, £150k in 18months then £500k within 12months. Actually makes you wander what the point is!
However, the 20p warrants are a good indication where the SP ‘is’ going as Altius would have modelled the deal just on their knowledge of Canada. They couldn’t possibly account for unknown success in Cyprus so that would be upside risk but the would want access to it.
The last known cash position is £2.4m in the AR for Dec 31st. We have to take ops spend out of that. Pay, percussion drilling, new geophysics campaign, diamond drilling and acquisition costs. Sounds a lot but not really that expensive. We also know from the AR they are aiming for another acquisition with the intention of becoming a major listed copper play.
I think they have well over £1m cash left but of course they will raise. Imo after results and at a higher SP because we know/hope there is more than £1m work here!
“...recent diamond drilling, hit two massive sulphide deposits with intersections of 11.6m and 16.6m. In both strikes we encountered both very high grades, in the top 10% of such deposits globally.”
Usual caveats,
Trek
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