I've just looked through quarterly report ending March 2008] At 31 March 2008, cash and deposits totalled $85.5 million (Dec quarter $136.4 million). The drawdown in the cash balance was due to the following significant items: • An increase in working capital at Broken Hill resulted in a net operating cash outflow of $13 million, • Capital investment of $5 million at Broken Hill, the majority of which was in new fleet equipment, • Mine development at Southern Operations, North Mine and Potosi of $11 million; • Debt repayments (commercial hire purchase agreements) of $4 million; and • Tax payment of $8 million At the end of the March quarter the company had $28.2 million in debt (Dec 07: $24.2 million).
So cash balance should be around : $136.4 - ($13 + 5 + 11 + 4 + 8) = $ 95.4 But why there's only $85.5 million cash left ?, would that represent $10 million lost from operation for the quarter ? Or maybe more given the debt level has actually increased by another $4 million ($28.2-24.2). If this is the case, this company might be suffering from diarrhea and starts losing weight rapidly. The appreciation of AUD$ and zinc/lead price drops have make it even worse. Can't wait to see the blood test (3rd quarter report). Merger is the only remedy IMO.
PEM Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held