Solimar have enough cash for the next couple of quarters but as far as we're told, none of that $1.8 mill will be directed to the development of the Paloma project. Solimar and Neon reached an agreement back in May, whereby Solimar reduced it's position from 25% to 15% of two lease areas in Paloma. In exchange, Neon provides the further funding required for (only) the drilling and testing of Paloma 3 and Paloma-deep 2. So basically Neon acquire 10% off Solimar, raising their stake from 75% to 85%, and Solimar are off the hook for funding (just for now) but still retain 15%. Solimar did this so that they can direct their remaining funds for testing and development of their Kreyenhagen project which at the moment they deem to be a higher priority. So, I'd say the company's fortunes depend more upon results at Kreyenhagen, but certainly success at Paloma will help.
This is what I interpret from looking back at announcements from last May up until the recent September quarterly. Seems pretty clear to me but if anyone has a different take I'd like to know.
As always, DYOR.
SGY Price at posting:
$1.05 Sentiment: Hold Disclosure: Held
