If (when) KGL get the go ahead for Andash, it will cost them about $90 to 110 mil to build the plant etc.
They currently have cash of around $32 mil, they will use a fair portion of this cash to get Burn going and able to self-fund. I think from memory about $ 16 mil, I assume the remainder of the cash will be spent on Admin and drilling at Jervois, and Andash.
Even though KGL have a $50 mil line of credit they will either have to borrow additional funds to get Andash into production or do a capital raising.
No doubt, they will do a cap raising for Andash, and use the 50 mil loan facility available. To me, this means they will raise about $60 mil initially to get Andash on track.
Additionally, if they go ahead with the Jervois project and elect the 2.5 mil tons per annum scenario, they will require $310 mil
For a company currently capitalised at about $120 mil there is a lot of forward funding aspects to consider.
According to the figures provided, once Andash is up and running, there will be significant cash flow but they will owe about $50 mil in respect to the Andash loan, however even allowing for another capital raising at a higher price, KGL will still have to borrow a significant amount to fund Jervois
I wonder if in this current economic climate that is achievable for a small company without considering joint venture partners
KGL Price at posting:
$1.03 Sentiment: Hold Disclosure: Held
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