Ann: Banking Facility Update, page-7

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kojak78

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01/09/17

17:41

Post #: 26940243
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Originally posted by kojak78 ↑

I guess we now know why there was no capital raise and why Purvis resigned: The $10m liquidity requirement was not the only one and it was clear they would breach the $100m figure.

They need a waiver from Investec anyway. And it looks like they will get one. Best Investec can do as it won't be easy or even impossible to sell the Guyana subsidiary they have as a collateral due to intercorporate debt. New liquidity limit $5m?

Based on the cash flows from June quarter I would estimate they are 8.5m-ish liquidity-wise right now. September being dry season probably not much more outflow going to happen. End of September the debt repayment which will leave them with 5-6m liquidity.

So despite my estimate there will be no new capital needed in the September quarter.

They basically do need whatever they are going to burn in the December quarter (remember: dry season and less hedges). After that hedges completely gone and Smarts 3 back on track again.

So I will shift my focus to December financials now.

Buying by Elsztain indicates he is going to do a deal involving Casposo (meaning his buying price will be the bottom), cash for the 30% would be more than enough for the December quarter and could even be topped up with a $4-6m mini-cr.

Troubles that could be anticipated for a long time but that are playing out in a very different way from what was to be expected.

Hopefully they will get the company and current management through the nadir as the future with the complete mine operating again instead of just being in an emergency mode looks much better.

Expand

Here is my estimate. Based on Ken Nilsson's 60-70k production without Smarts 3 estimate.
Just assume 65k ounces. Due to rain seasonality June quarter 15k ounces, Sept 16k, Dec 17.5k, March 16.5k ounces.

Based on the hedges remaining, strike prices and dept repayment schedule and fixed costs (assuming $5.2m per month, more than Ken told us recently) the cash outflow would look like at gold spot price $1315:
June 2017: A$8.5m (matches report)
September 2017: A$6.7m
December 2017: A$3.1m
March 2018: A$2.5m
June 2018: A$6.5m

If Investec lowers the liquidity requirement to A$5m, Troy will need no capital for the September quarter. End of September A$6.5m in liquidity left.
So they would need A$12.1m (Dec - June quarters).

That is without Smarts 3 operating! If they get that one back online in December they could get through with "only" A$4-5m.

So if Elsztain pays the remainder for Casposo sooner than scheduled it will be enough to get Troy trough the nadir even if Smarts 3 is not fixed.

Last edited by kojak78: 01/09/17

TRY Price at posting: 12.0¢ Sentiment: None Disclosure: Not Held
6 Upvote

0 Great analysis

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