Regarding the covenant minimum cash balance of 15M by October 1st, I believe it is still achievable without C&M.
Expected cash outflow is 57.7M, now we know that the development of fines circuit has been put on hold, drilling is also reduced.
If we cut the 6.6M cost for fines, 1.2M cost for drilling, that leaves about 50M cash outflow expected.
Cash at beginning of quarter is 20M, raised another 10M from Jiangte, plus the recent 15kt shipment (15M)
20+10+15 =45M
Short of 5M revenue to keep balance. In order to satisfy the covenant 15M requirement, further 20M of revenue is required.
In summary, if there are 20kt more shipments by 1st October, the covenant will not be breached. So A40 needs 1 more 10kt shipment in August and September each to stay afloat. Tantalite sales should generate 2-3M revenue too.
P.S. I saw some previous posters used the cash balance of 6M to start this calculation, however 6M is the cash balance on 23th July, not at the start of the quarter. The cash balance at the start of the quarter is 20M, in other words, the company has already burnt 14M of cash during the first 23 days of this quarter.
In summary, if Alita is able to ship more than 10kt shipment in August and 1 more in September, and the drilling and fines update are put onhold, the debt covenant will not be breached and the company will still have 15M of cash at the beginning of next quarter. However this does not comfort me at all, it is only achievable because of the 10M raised from Jiangte. Do we need to raise at least 10M each quarter to stay afloat?
