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UML

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3.3¢ unity mining limited

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meric

1,591 Posts.

42

14/04/15

23:00

Post #: 15087824
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Originally posted by Get lost bear ↑

Hi Chris

While I love your enthusiasm for this company I think your predictions for the share price are being influenced by the beer goggles you have on. A couple of points to consider;
- While it's great they have $12m in cash backing and that is likely to increase when this quarter's report is released, at the 31 July 2013 they had $27.7m in cash. You might want to investigate what happened to it all.
- At the end of this year Henty will move to care and maintenance and the company will have no way of generating revenue for a period of time. At best Dargues will not be producing until later second half 2016 and that is providing there are no hold ups at government level and they can secure around $70m in funding for the project. The cash balance will drop steadily until Dargues comes on line.
- Forget Bendigo, maybe they can sell/utilise the plant but no more gold will come from there.
- A rising gold price will have only limited benefit to the balance sheet. The company has purchased put options covering the first 2,500 oz of production out of the Henty Gold Mine each month through to June 2015 at a price of A$1445/oz. This is approximately 70% of production so a gold price of $1600 AUD will only be realised for about 30% of gold sales.
Nonetheless a rise to even 5c from current price would be a great result. I still hold a small parcel so 50c I would love to see!
Cheers
GLB

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If it's a put option it means they can sell 30% at current gold price and 70% at max(current gold price, 1445).

A put option is an *option* to sell, not an obligation.

Might be fun to gather up $10m, buy up the company and redistribute the cash for instant profit...

UML Price at posting: 1.0¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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Rush to the door, page-29

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