Mate we ALL make misinterpretations in our communications from time to time. And there have been many misquotes , misinterpretations , and incorrect statements made on these forums. Even from you. And we ALL have to own those error's in communication. Even you. However in the balance of the content provided over the duration , it would seem that my posts put up in the forum are indeed far more closer to the money and accurate that your claim that an additional debt covenant would be placed on AJM requiring it keep a minimum of $15 million in it's cash balance at all time. or even some of your other statements regards AJM facing down VA.
Seriously mate , in the real world where they have $2.398 million of cash and $5.559 million in trade debtors = $7.957 million in cash or readily available cash at 31 December ( so a few on this forum need to refer back to the key differences between the Balance Sheet performance measures eg. ' Quick Ratio verses Current Ratio.... ).
When you were claiming your $15 million covenant requirement , I made the comment in my post on the 26th January as follows:-
Then there were many comments regarding COH balances at 31 December of ridiculous figures of $20 and $30 million, whereas I stated they would be closer to $10 - $13 million. Now if you consider the ' Quick Ratio ' measure and include at least debtor's , prepayments , and the ' hidden ' and true value of our Lithium Corporation Investment which is hidden away now in the conveniently and somewhat diminished category of Financial Assets in the Non Current Assets classification - you would get between $10.467 and $13.092 million .....
There was also the 17 cent call on the SP prediction for AJM's first day of re-listing - whereas I stated it would trade to a low of 4.5 cents ( VWAP for first day relisting ) before finding it's way back to 5.1 - 5.2 cents ( which it could very well get to today ) ....
In so far as the potential loan balance in 3 years time , I failed to communicate or illustrate my intended reasoning's , however this does not take away from the fact that in 3.5 years time should they do nothing about the principal , and as I stated continue to capitalize the interest , if the AUD was to stay the same or drop to 55 cents , the amount of Australian Dollars which would need to be found would be between A$ 425 and $A 502 million . These amounts would be fact under these conditions How I chose to illustrate it was in error.
So lets then look at something at little closer down the track . Like perhaps the payment(s) which may or may not be required by 15th October 2020 , and as per there own statements from their recent announcements:-.
" At this stage, the Company anticipates that the payment of the February 2020 interest and the amendmentand waiver fees will be made from operational cashflow. " So yes it would seem they have accrued this as a current liability with obvious intentions to pay for it - so not a ' non cash ' item as some have suggested
• Payment of an amendment fee of five per cent of the aggregate principal amount of the loannotes (including any capitalised interest) as at the February 2020 interest payment date, whichwill be capitalised and added to the principal amount of the loan notes and become payable(together with any accrued interest) on 15 October 2020.
• Within 60 days, the payment of a waiver fee of US$1.6 million covering the waivers referred toabove
• Other than the payments for February 2020 interest, the amendment and waiver fees detailedabove, no repayments are due on the loan until its maturity in August 2023. However, theCompany continues to work with its financial advisors to re-finance the debt on more favourableterms as soon as practical.
So based on ALL these comments disclosed in their ' New Financing Transaction ' announcement , approx $12,050,000 ( 15% ) plus $8,050,000 (5% ) for a total of USD $20,010,000 will be due and payable on 15th October 2020. If the Aussie then remains as is which is likely .....at 65 cents , the amount required from ' operational cashflows ' as they say would be a staggering A $30,923,076.
So with 2019 Net Profit / (loss) for the year being ($26,713,000 ) - or Total comprehensive income / (loss) for the full year being ($31,967,000) and the Net Profit / ( Loss ) for the 6 months to 31st December 2019 being ( $31,624,000). How exactly would they be expected to create a $60 million turnaround in performance given the existing climate in the next 6 months , in order to find the ' free ' cashflow necessary in making this approximate A$ 30,923,076 payment when it falls due. The simple answer is that they won't need to because they will have had to find IMO alternative financing by that time. Either that or like I said , they continue to capitalize these expenses. Either way , at the moment it looks as though they have bought themselves 6 months rather than the 3.5 years people are currently thinking.
Unless , and lets look at something a little more positive and something which I believe has yet to be discussed on these forums. The subject is of course what I have touched upon ' above ' which is AJM's investment in Lithium Corporation Nevada which appears to have been systematically written down to the rather obscure value of only A $816,000 at 31st December 2019. Lets take a close look at it :-
" In November 2012 the Group acquired a 14.7% interest in Lithium Corporation,Nevada USA by way of a non-brokered private placement. Lithium Corporation isquoted on the US OTCBB (Over The Counter Bulletin Board). "
About Lithium Corporation
The Company maintains a strategic alliance with Altura Mining, an ASX listed Lithium mining company that is currently producing at near nameplate capacity at its 100% owned world-class Pilgangoora lithium pegmatite mine in Western Australia.
I note that LTUM was up 21.28 % in overnight trading to $usd 12.14 cents with a resulting market cap of usd $59.22 million . Now granted that as at 31st December ' LTUM's SP was reflecting only 5 cents , it would seem that going forwards the numbers posted as at 30th June 2019 and subsequently at 31st December 2019 will have to be revised more in the upwards directions....
As per year end account in 2019 , note 12 :-
Carried forward from previous year 4,018
Changes in fair value (2,732)
Total listed investments at fair value 1,286
And obviously as at 31 December as per Note 8. , it was only reflecting a written down fair value of only $816,000. A far cry from what it's real current value would be based on LTUM'S most recently traded values as follows:-
usd $ 1,706,670 = A $2,625,646 at a current exchange rate of 65 cents.
And to just recap what we all should know in terms of what they paid for this investment - They purchased 11 million shares at 5 cents per share as per this headline back on 30th October 2012.
" Australian commodity producer Altura Mining has agreed to acquire a 15% interest in American junior mining company Lithium Corporation for $550,000. "
They also had a options to acquire a further 11 million shares at 10 cents on the first anniversary or 15 cents on or before the second anniversary of the transaction's closure. However on inspection of the accounts , I don't think they ever exercised these options..
So granted they revalued their original investment by some 7 times from 2017 to 2018 , it would appear that there is almost a $2 million readjustment pending in AJM's favor which could ultimately require revaluation in the financial accounts of the company.
Interesting to note that back in January 2018 at Lithium Corporation's peak share price of 55 cents , the company would have been valued at somewhere around usd $ 271.425 million on 12th January 2018 ( or A $361.9 million using an exchange rate of 75 cents , and actually 80 cents on 19th January 2018 ).
So that would have been a valuation of approximately A $53.2 million had AJM decided to part company and divest this holding at that time. Coincidentally , this was also exactly the time of the release of the Morgan Stanley Lithium Industry oversupply report.
(20min delay)