Thanks Rakia, I've just got a couple of points on your post , everything else I agree with you.
first point from your post,
- The good thing is that there isn't a significant operating activity cash flow deficiency (as was evident in the prior 6 month comparative period), however a cap raise may be warranted, given the cash balance is at $185k, which represents roughly 9 months of operating activity cash flow requirements (not considering investing activities, which amounted to $246k for the 6 months). Imo, any future CR will be for specific works to be undertaken and limited in share dilution. Remember one CR was scaled back after it was oversubscribed. Also the cash balance was prior to the CR which raised $1.2 million via Share Purchase Plan and private placement subsequent to 30 June 2020, which were both heavily oversubscribed.
This para from the ann regarding forecasted 12 months cash flow subsequent to the report summarizes it.
As at 30 June 2020, the Directors have prepared a cash flow forecast, which indicates that the Group will
have sufficient cash flows to meet all commitments and working capital requirements for the 12 months
period from the date of signing this half-year financial report. Second point from your post,
- Further, a large portion of the deferred consideration for the Guadalupito Project ($1.5m) is now owing in the next 12 months, which contributes to further pressure for a cap raise. However, it is noted that some of this can be paid in shares, in conjunction with cash (however obviously this will be a slight dilution, not too material).The Guadalupito Project will not have any adverse effect on us if we don't proceed with it. The most that could happen is we forfeit the project. Lrs is hoping to get a JV partner similar to Integra .Honestly I don't think it's worth perusing unless a JV partner is brought in on the deal.
This para from the Ann confirms no adverse monetary implication on LRS
• Despite the non-payment of cash and non-issuance of shares in accordance with the agreement entered
on Guadalupito Project, the Group is currently seeking to renegotiate the related payment terms and is
confident in achieving a favourable outcome where a moratorium of any payment at least for the next
twelve months will be obtained. Management further confirms that the non-compliance with the
payment terms has no adverse monetary implication on the Group;
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