someone mentioned the requirement for board recommendation of a deal pre 31 July. I thought about this one while on holidays...
That funding condition must have been inserted as and when a deal was on the table. if a deal was not visible, who and why on earth would you insist on it? what if a deal was never presented... what a hopeless [... and/or unconscionable...] condition!!! better still, who and why on earth would you agree to it other than you thought it 'doable'?
(a) the company is in the business of Cu production. It is not in the business of selling itself. (b) the problem is not so much who owns it, but the business incapacity to comfortably meet debt repayments. (c) The repayments schedule is premised on the BFS estimates which assumed 3.0mt p.a. mill processing; significantly lower C1 costs; Cu production of around 26kT; Ag 691koz. All BFS targets are in sight but not yet delivered.
IMO DML is looking at the targets and whilst unlikely to achieve the cash costs, they can and with a good breeze of luck will achieve them sometime during this qtr. I am hoping that a July review will reveal significant continued improvement ... that would certainly put the cat amongst the pigeons. (My 'hope' is underpinned by some fairly credible performances May & June).
They need to in order to attract a deal... whether it be a cornerstone investors; a new finance arrangement and/or complete a capital raising.
For me, I'd be aggressively farming investors. I think that in this instance, the cost of debt significantly outweighs the cost of equity so I would be displacing at least $80m with either a capital raising or more mature financiers!
on this basis, IMO there will be no deal July 31. Maybe August 31.
have a good one
DML Price at posting:
15.5¢ Sentiment: Hold Disclosure: Held
