My thoughts are that the Peru operations have proved more costly...

My thoughts are that the Peru operations have proved more costly than anticipated hence why there has been no further announcements. Just take a look at the December quarterly for details of the shipments. The first shipment was for 35,000 tonnes and went to China. Its safe to assume this was done under the 300,000 2 year deal done with GII. However the second shipment of 15,000 tonnes went to a Chilean steel mill. Its hard to know whether this falls under the GII deal. The prepayment was for only the first shipment so you would have to assume subsequent shipments to GII would either be funded via operating cash flow or a new prepayment facility. If Peru operations were cash flow positive, then we should be seeing more announcements for shipments out of Peru. Would be good if the company gave us an update about the Peruvian operations. The announcement today is only related to Paulsons. In terms of the deal announced today:
- Its an exclusive marketing deal meaning they will be paying GII a marketing fee. The fee wasnt disclosed. But this could be worth ~$20m USD to GII (estimated on 6.35mt @ $142/t x 2-2.5% fee)
- SRK has basically handed the keys of the operations to GII as security for the loan. If SRK fail to make the appropriate repayments then GII can walk in and takeover.
- I suspect the loan facility had more appeal to GII than participating in a cap raising as they could potentially need FIRB approval to increase above 10% shareholding.
- I suspect there still will be a cap raising on the cards. This will have to happen before November 2022 given the approval at the agm last november of 7.1a. I just dont know how they can fund Peru with out more cash given the operational cash flow is negative.

If i didnt have a bee in my bonnet about mgmt i would perhaps see this as a half glass full announcement. Will wait for further developments to see where this all lands.

FYI...
There actually appears to be an error (or confusion) in the latest announcement regarding the prepayment facility from 14 April 2021. The below states the prepayment was for US$2m. However todays announcement states the prepayment was for US$7m.