" GOING CONCERN
The consolidated financial report has been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business.
The Group at 30 June 2014 had cash on hand of $9.2m, net assets of $394.0m, net current assets of $12.5m and an approved finance facility of US$65m to fund the Rocklands Project.
At balance date the Group was completing the mine development and associated infrastructure and commissioning of the Rocklands mine processing plant, with the plan to derive revenue from ore
processing and Direct Shipping Ore (‘DSO’) during the year ending 30 June 2015.
During the year the Group completed a rights issue and raised $56.5m (before costs) from new and existing shareholders. At 30 June 2014 the Group had significant mine development and associated infrastructure commitments of $42.3m (refer Note 27) and additional capital expenditure of $39.1m is planned in order to successfully commercialise the Rocklands Project.
Subsequent to year end the Group has used US$45m of the approved finance facility.
The Group is also negotiating with a number of smelters for the sale of DSO which is being stockpiled and cash flow from DSO sales may reduce any need for raising of additional equity or seeking of additional finance facilities.
The directors have prepared cash flow projections that support the ability of the Group to continue as a going concern which encompasses use of cash funds at balance date and utilisation of the US$65m finance facility. These cash flow projections are based on the successful completion of the mine development and associated infrastructure and commissioning of the Rocklands
mine processing plant and assume the Group obtains revenues from the sale of native copper and DSO prior to commencement of production.
The ongoing operation of the Group is dependent upon:
• Successful commissioning of the Rocklands mine processing plant and the Group receiving cash flows from the sale of processed ore and DSO; and
• The Group raising additional equity funding from shareholders or other parties to the extent needed.
These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern. In the event the Group does not receive cash flows from the sale of DSO and processed ore and the Group is not able to secure further funding, the Group would be required to reduce planned expenditure in line with available funding or may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations until the funding is received."
CDU Price at posting:
$1.29 Sentiment: Buy Disclosure: Held
