agm vaporware

10 days before the AGM we can safely expect one or more press releases tailored to direct shareholders' attention away from the company's dismal performance.

Since there is nothing substantial to report I would expect them to talk about exploration and "exciting findings" at secondary targets like Iron Duke and Petersen. Since they didn't have the money for a full-scale drill program, I assume they had to resume to kicking rocks and reviewing years-old data in order to come up with something they can talk about. And maybe there will be some bridge funding, too.

Back to what really matters now, financials are in an alarming state. For every $1 of product sold the company pays ~$3 to make it. Accordingly, CNQ is burning roughly $0.75M per quarter on production alone. That's 2.9M during the last 12 months. On top of this, add 0.5M of admin costs. 3.5M of our money, gone!

As a result the company is running out ouf cash again. Mitsubishi made an advance payment of $414k during the second quarter. However, this advance payment has not been applied against third quarter shipments. As far as I can see CNQ still owes the money (or concentrate) to the Japanese. Had the amount been applied, cash at the end of the quarter would have dropped to $0.147M as opposed to the $0.561M reported.

Consequently, the company is talking about taking on debt. In fact they are talking about TWO debt arrangements, an "interim loan facility" and a "full funding package".

While the company continues to make reference to its DFS that was based on a $55M plant, they now propose a totally different, crippled no-mill-plant that comes with a $15M price tag and that certainly can not yield the same recovery and production figures. The crippled plant will deliver much lower figures than those projected in the DFS.

In the meantime, our fellow tungsten wannabes a few kms further north have taken the lead. I fully expect them to obtain their mining permit sooner than CNQ.