Phew.... what a great thread (some great thoughts shared by
@Drayno on the trading halt thread to).
Great post too
@eastwest101,
@CashedUpBogun,
@calmbeforestorm,
@plough,
@RooBendigo,
@zebster, etc.
Finally had time to sit down and give the capital raising some real thought (though I appreciate that almost everything I have pondered throughout the day has been discussed in a variety of ways), I also got to enjoy the MoM podcast which heavily discussed the raising, though I don't agree with them on a few things:
* I think SPR management want to run this mine.... not sell it (SL has been incredibly cagey and likely assisted in the share price being higher.. less dilution)
* I don't think there are going to be any issues with the metallurgy
* about there not being a willing buyer of SPR (though they do think RMS may still have to move...)
* SPR are not just good at marketing themselves... it's the drill results that have done the real talking.
* a shame the MoM team did not ponder how much of a waste the initially planned decline would have been compared to what was announced today, as in, it was clearly very prudent to drill more first before developing the decline.
* they don't even touch on how the U/G development will also ensure access to FP and WW.
There are many things I do agree with though:
* Timing of capital raising was very strategic and... a great move - why, because there are very few projects in W.A getting developed, so contractor rates to dig/develop the portal/declines are much more competitive than last year (I believe SL basically said as much today)
* The 'exploration decline' is for all intensive purposes a fit for purpose production decline (MoM words, worth a listen I think).
- in essence, the plan means they will be able to mine incredibly efficiently with multiple mining faces
* not going to be any open pit cutbacks, except, I sort of disagree, I believe they will mine an open pit (Gilbey's North), but only because it's already cutback and relatively high grade.
- which I think logically will provide a nice high grade kick to the start of the mine plan
* very much agree with the team about SPR looking a lot like BGL on it's trajectory (share price and market cap wise) in sentiment and premium.
- bit disappointed they did not really acknowledge just how impressive it was to raise $80m (plus do a separate book build for another $33m). Demand for SPR script is clearly huge.
* will be very interesting to see the Top 20 post cap raise...
My own thoughts - capital raising price is at a 45% premium to the last capital raising (sadly, most explorers have to raise capital at ever lower prices)
The size of the capital raising is much larger than most likely anticipated, which for me bring about both protection for potential buyers and the ability to not just develop the declines, but also.... not that they are saying this right now, but be able to start buying long lead items.
There is lots of flexibility in the funding plans, with $24m (+ the $9m set aside for just that) available for the plant maintenance and admin.
I was also extremely pleased to see that the cash at the end of March was still $30m (they basically spent $9m for the quarter, which I think is impressive considering how deep some of the holes have been).
I get the impression that the plant throughput rate will sit around 1.2mtpa (though... if most plant's can outdo their initial nameplate, perhaps it will be closer to 1.4mtpa.
In the end, I will sleep more soundly, because for now, SPR don't have any operational risk, nor funding risk, just a matter of the drill bit doing the talking (though it won't hurt to have the U/G dev ongoing and 'site infrastructure' starting to trickle in).
I am hopeful the next raising will occur around $1, with it enable SPR to become a producer again..
Good luck to all holders.
(20min delay)