Nobody is unhappy with a 27c price, I'm stoked having bought in during the recent sell-off. Amongst all the back slapping that div's are brought forward 4 years and BSE is now a yield play, has anyone an idea when-how BSE is going to fund Tolliara?
This is my summary of the required cash equity to fund, taken from the Dec 2019 DFS further below.
Guidance for 20/21FY coming is a grade drop of ~0.5% to 3.25% THM for Kwale. This will drop operating cash generation, although if no exploration and no Tolliara work is on then thee will be lower ex-Kwale operating costs than this years $33M. Net cash before another divi might increase between $70-80M depending on exploration costs, sustaining capex etc this FY. If BSE intend on paying out 3.5c each year, knock off another US$30M again Sep 2021, net cash will double to ~US$100M plus one Qtr more, but still a long way from the $288M target ...?
Obviously there is a strategic reason this divi was paid, I'm just not sure what it is. Doesn;t make sense to sell down BSE ownership cheaply into a JV for funding while paying out taxable divis on the other. Doesn't make sense to do a CR for funding in 1-2 years time after paying out divi's but I have seen such before. Maybe major holders put pressure on the board for cash (major holders could replace the board between 2-3 of them such are their votes). Perhaps the board are worried too much cash will attract an opportunistic bid by one or more of the major holders, who will use BSE cash to essentially pay for the TO. Maybe BSE see Tolliara development pushed out 2-3 years with covid restrictions and/or demand for a new major mine postponed?
Any ideas from those closer to management?
