Looks like the mining operation did not go according to the plan.Gold dropped towards $1600 in January and so the cash flows would be lower. And if the ore was not rich enough, that would compound the problem, I suppose you do not know how many ounces are in this truck load or in that one until you completely process it. And if there is not enough money in the kitty to tie you over, things could become grim. Still they had $3.5 mill in cash and receivables, that should last for a while. But of course there is the other expense of installing the crusher, so possibly they burned through the cash much faster than they thought. I remember while back OZ Minerals had one billion in the kitty when they started developing their gold mine, and they almost went broke.
Also the placement brought a lot less money than originally expected and the paper work involved must have cost a mint too.
IMO the situation ATM is not dire yet, otherwise they would have to call the administrators and that did not happen as yet. So they must still be solvent, just unprofitable.
Let us see what will happen next, but it could be a while now, there is not any indication in the suspension request when we can except more news.
KMC Price at posting:
2.0¢ Sentiment: None Disclosure: Held
