I agree with everything Emptytrolly has said. There has been too much communication which is designed to muddy the waters and obscure the true situation rather than genuinely inform. DEL gets very cute with the language it uses. Quite deliberately, I'm sure.
From the website:
From Friday's report:
A house with four walls, windows, doors and a roof might be *constructed* but it isn't *completed* if there's no carpet, taps or kitchen sink installed. I'm sure the author knows the difference. A constructed house is useless if it's uninhabitable.
From December's quarterly report:
From Friday's release:
"Potentially" is another word for "might" or "should" or even "hopefully". The paragraph has been copied and pasted with that one word deliberately added. It shows DEL no longer has the same level of confidence in getting Palisade financing. It's a huge concern.
In the December report, funds were not supposed to be burning at the same rate.
Yet in Friday's report nothing has changed:
I note that even YVW hasn't signed off on the build yet. Think about it.... You are looking to buy a house and you have access to the builder's financial statements. You can see the builder has no incoming recurring revenue, no builds in progress, no assets aside from an illiquid parcel of land, and a quarter's cash in the bank as liquidity to meet short term funding. Would you pay a deposit? Would you pay a year's gym membership if you'd read stories and seen news articles which suggested the gym was borderline insolvent and pinning its hopes on something outside its control to stay afloat? I suspect Planum Partners and potential EPC clients think the same thing. "Will this company be in business to finish this plant?"
The last CR felt like a tin being rattled. Personal emails and SMS from DEL. The raise being extended, supposedly because shareholders may have been delayed over Easter. It only raised 1.63m of 2m. There is zero demand for another CR. Even at 1¢, how much money would you put in? They'd struggle to raise $500k. The dilution would be horrendous and the money wouldn't go far, just as Sour Lemon said.
I think of small cap mining companies. They spend a long time working on a pipeline project. There are feasibility studies, definitive feasibility studies, drilling, testing etc. Many reports in excruciating detail which show projected costs and expected returns. DEL has released *nothing*. "We've got an exciting pipeline project which is expected to be ready for FID in early 2024". Some CAD renders. Yeah, sure you have.
Would Palisade put in another $5m? Would DEL get a loan? Of course not. Good, small cap mining companies have founders who take small salaries in exchange for share options to save the company money. They're not collecting $400k a year. They know their payday will come when the mine is in production.
The directors here are doing very nicely. The investment banks which organised the IPO and CR were paid well. DEL staff presumably are well paid (as they should be). Planum Partners took a nice fee. The Ecogas and BLM people have working plants worth much more in 2023 than they paid DEL. So who hasn't done well out of this company? Wait a second while I go and look in the mirror.
I did some work for a company a couple of years ago. Communication became almost non-existent, multiple promises to pay staff and deadlines broken without warning at the last minute. It was a service industry business. They had no money left, no assets, and were pinning their hopes on a hail mary, mystery overseas investor who was doing due diligence. The owner didn't want to put in more of his money. They eventually closed their doors and staff were unaware of the insolvency until they arrived at various offices to find signs on the windows and chains around the door handles. The DEL situation is sounding eerily similar.
Even if Planum Partners provide FID tomorrow, almost nothing has been spent over the past 6 months. Only $21k. More was spent on the supposedly-completed BLM. SA1 was supposed to be built in 2018 and 19. They listed to obtain funds to build it. Misled investors into thinking it was being built. A 12 month wait while a company was found to fund it. Another six months while Planum decides to really, really, truly fund it. Yet I suspect that even if FID was reached tomorrow, none of the long lead time items have been ordered despite previous communication. They'd presumably use Planum funding to order it. 15-18 months to build it. Commissioning is supposed to take 3 months, according to Joe in the October video update. Yet the NZ plant has been operating normally for 6-7 months without sign-off. All that time without recurring revenue. Only the payments received from Planum and YVW.
The report released on Friday was horrible. I wonder if it was even written by a human, or was a product of GPT Chat. A letter or video explaining the situation honestly to investors should have been a bare minimum given the situation.
I am inclined to sell, wash my hands of this mess, take a tax loss which I can offset against other share investments, and hope everything gets resolved from a distance. After reading and re-reading Friday's after COB report, my confidence in management is rock bottom. There are better investments elsewhere than pinning one's hopes on the organisational skills of Hamish and Joe.
