capital management

NMI is a text book case for students of risk.

Having had a near death experience in early 2009, you would think that lessons would have been learned ( it was short of funds 12 months after float, in early 2009 it traded with two directors was negotiating with creditors etc etc) survived but a look at the the 2010 half yearly shows that things are looking pretty fragile again and that was before the Japan implosion.

A quick glance at the balance sheet suggests that yes $2.1m in the bank for a junior looks pretty good, but look more closely. As usual trade creditors are being handbraked and total together with other payables some $600k. Well that leaves some $1.54m net but whoops $400k of that balance belongs to some eager punter wanting to take up convertible notes in the next lifestyle float Steelmin. So that leaves $1.14 but then in post balance date notes NMI has taken up some 620,000 notes at 25 cents in its own sub Steelmin so its down to $1m.

Have a look at the projected cashflow for March quarter 2011 expected outflow $1.125 so no doubt the long suffering trade creditors are being strung out again. But maybe things are not so bad as the drilling at Kanowna the only blue sky asset in the stable has been suspended while they work out the water problems. Certainly helps slow the cash burn.

And of corse with such a rock solid financial position it is so good to see such acts of Corporate benevolence that NMI has picked up the cost contribution on its Director related entity Balagundi Gold for a mere $87k.

Yes a text book case of risk and lifestyle. Never a dull moment here.

Just the team to run an operating production business in Bosnia, so maybe Steelmin will takeover as the new textbook case of risk.