Cheers
@wassa for correcting me on my silly 4 koz error. I have reviewed my numbers.
https://www.wa.gov.au/service/financial-management/taxation-and-duty/pay-dutyStamp duty will not be payable till 30th June next year I believe: That offers a margin of safety for a while.
"Generally, you must pay duty within:
- one month after a duties assessment notice is issued or
- 12 months after the date a transaction is entered into if it relates to land or mining tenements or
- three years after the date of a transaction if it is a subdivision or issue of title agreement."
So we are looking at a midpoint of about 18000 UG t at reserve grade of 6.4 g/t (reserve grade OK), which is about 3.7 koz per month if management are to be believed - at the stage of steady state UG - maybe in December. I suspect they have the option of high grading a bit UG to get some earlier cash if they come under severe balance sheet pressure. You look at the reserve diagram of SOE from Sep 29th, and there are lots of purple pink and red sections that appear to be accessible. Also from the resource update " Some 24,000 ounces is now in the measured category at an average grade 24.2 g/t Au representing 41% of total Mineral Resource inventory within Star of Erin and increase in total Mineral Resource grade from 5.4 to 12.8 g/t Au." might be a hint.
So if the rest of the plant is to be filled with mostly Scotia 65 kt pcm at nameplate - so maybe 65 kt at 2.5 g/t = 5.2 koz pcm contained gold. They say they are running at 11% above nameplate. So 8.9 koz pcm @ 95% recovery is about 8.5 koz pcm run rate. So about 70m gold revenues pq if all goes as they are suggesting.
Even in the next quarterly we will not see the balance sheet. We can't tell what level of urgency they will be dealing with re payables. But there will be optionality to some degree both on UG grades and who gets paid when. I still think this appears to be a bargain, and concerns about the cash position are overblown if management are being candid. However I'd imagine they would tell us how much cash they have if it was strong. They might be juggling a bit to keep everybody happy.
So current assets at 30 June with the 28 net cap raise might be $85m. The current liabilities excluding the debt facility and $8m stamp duty was 58.8m, which is net 26.2. Seems to me there is a fair margin of safety. I reckon Sep would have been close to cashflow neutral at least with $15m revenues, and costs around there as well, on an accruals basis.
(20min delay)