Ann: Operational and Corporate Activities Update, page-75

Having had time to ponder, I wonder whether the need for more equity is because the money raised for the expansion may not be used for other purposes. The company had $59m after raising around $57m late last year and that was down to $52m by the end of 2021.

Now we have $48m in cash of which $45m is earmarked for the expansion to 120kpa.

So there is just $3m left to fix the plant issues by my calcs. The question is: Just how much will be required to ensure the plant is running
and producing a marketable product?

At the time of the $50m raising it was intimated that the company was on the verge of being a fully fledged producer and needed most of the $50m to expand the project.

Following the $50m raising, the rights issue brought in around $7m of the max $10m. We were told of a few extra issues and the end of Feb announcement would be to give us an updated commissioning and production ramp-up.

What we got was a probably just another tale where we get told just enough to satisfy their requirements but with a couple if caveats thrown in such as a need for an unspecified cash injection and a risk that things still may not work, which sort of could be anything really.

So what we don't know is whether the company can dip into the $45m needed for the expansion and if so, why don't they get the current plant running at full production before committing another $ to the expansion. Once proof of production is fully satisfied, the remaining cash can be used to start the expansion project and then raise whatever the shortfall is.

If the $45m can't be used to iron out the current issues, then we will have to suffer a cheap equity raising or increase in debt levels. Either way, we will be getting reamed, that's a given imo.

Just my musings