The phrasing used wasn't David's best moment, however I think he is technically correct. Various calculations were done in HC on the likely cost of the phase 2 drilling program that is planned, underway and implemented. None of these exceeded $1m. With $3m in the bank they would have had enough to fund this and some/all of a very modest phase 3, but it would be getting tight as they progressed into phase 3. Phase 3 may have needed to be slow and spread over Q1 and Q2 of 2024. Also to keep cash ok, TG6 may have been needing to make sub-optimal decisions like RC drilling in instances where DD would have been better. Only the financially illiterate would have thought the cash would last indefinitely.
Clearly TG6 didn't have sufficient cash for a robust to large sized phase 3 campaign - that's self-evident by how much drilling costs and what cash they held. Even the phase 2 campaign plus nickel drilling may have got them very close to or below ASX's 2x expenditure guidance in the quarterlies rule when they report the Dec Quarter (Start with $3.235m, spend $1.2m and you still have $2.0m in the bank. You are however breaking the 2x rule and explaining yourself to the ASX!!). Given the opportunity they saw in the Burmeister, they wanted to do a robust sized phase 3.
Personally, I wouldn't want to be trying to tap the capital markets in the couple of weeks leading up to Christmas or early in the new year so it was either November or late Jan. They decided late Nov. Having done a $10m raise they don't need to micro-manage cash for the Dec quarter report and can go full steam ahead.
It is still speculative, but can you name even 3 lithium instances where the following have occurred?
- The drilling area was selected on prospective soils and geology
- The drilling was successful in hitting 15+ grade metres in the best hole (and other holes at 10+ grade metres)
- Grades over 2% Spodumene were reported
- Spodumene has been encountered in drill holes that are 200m or more apart
- The project has used diamond drilling
- The project was abandoned as a dud as there was nothing useful there or in the immediate surrounding area.
(20min delay)