Lots of information to digest here. Certainly not for the faint...

Lots of information to digest here. Certainly not for the faint hearted. I make the following observations for stakeholders:

Over half of the $33.5m of "new funding" is a prepayment on future magnetite sales. It is not equity/shares. The Company will incur costs in the future and receive no sales revenue for it. From announcement 23 October 2023 :"...Together with the funds from the Pre-Payment, upon signing documentation in respect of the proposed Vendor Finance Restructure, Elmore will have accrued approximately A$42.2 million in financial debt with repayments linked to a maximum of 25.00% of the value of magnetite shipments..." There is more detail in the announcement and again note 24 of the annual report but the short version is as described above ie the prepayment will be by and large rolling forward. Certainly not uncommon.

In the ASX announcement of 23 October 2023 the Company notes that the prepayment arrangement is secured and yet no-where (in the ASX announcement, the Annual Report or the Notice of Meeting (NOM)) can I see the details of the security being disclosed. The security for the pre-payment should have been disclosed. From the announcement 22 June 2023 "..The Pre-Payment amount will be secured by first ranking senior security over Elmore...". There was a subsequent announcement 1/12/2023 that talks about executing security documentation. I expect they needed to get Oz out first to be replaced by Royal.

The Company is assuming that the SPP will be fully subscribed and raise $5m. This would appear to be unrealistic. Not sure I agree but that's the beauty of a democracy. @ACEMINER will be there ... I sure of that

The pro-forma balance sheet in section 14.1 of the Notice of Meeting is worth a close look (bear in mind these numbers are now 6 months old). The Company comes out of this with $17.5m in cash (and that is assuming the $5m from the SPP) but still owes $8.3m to creditors and $22.5m to Oz Pro (Vendor Finance) by June 2024. Is this a good or bad thing? Not so long ago, ELE had zot cash and liabilities up to its whazoo...

There is still a current asset deficiency (current liabilities greater than current assets - an indicator of insolvency) of $14m. I'm not quite sure this is a real "o' dear" thing for a couple of reasons. How its disclosed really ought to look at substance rather than legal ie prepayment is rolling; vendor debt is at least in part longer term. In addition, current assets are void of inventory (albeit you could argue burried in non-current assets). The prepayer clearly has a view that there is at least US$11m of inventory somewhere in that stockpile; the holders of the gold royalty also think there is circa A$27m of gold equivalents somewhere in the god-forsaken pile of dirt at Peko. So whilst I think its right to recognise this hideous thing call working capital deficiency, probably worth thinking a little more about composition and inclusions.Accountants aren't always the most informative lot

What a mess! or O what a feeling! Pick your thrill ride