Breaking down what they have said in that part -$1,700,000 for...

Breaking down what they have said in that part -

$1,700,000 for the interim replacement tailings filter presses - I don't have a problem with that as it is needed and is a near-term spending requirement - however they have ballsed that bit up where they say "to make up the full capacity" - we all know that the interim filter presses are only going to increase the capacity to 80-85% of design. They have stuffed that bit up - that was what they would have meant to say about the Permanent tailings filter press ($3,600,000). My understand also was that these additional filter presses weren't replacements for the original tailings filter press but instead would run in parallel with it - so the word replacement is a misnomer - but anyway they are needed - even though there still hasn't been a clear explanation as to why the current one isn't performing. So this $1,700,000 for the interim replacement filter presses equates to EXACTLY 50 million new shares at 3.4c each - which seems a rather odd coincidence.

$3,600,000 for the Permanent Tailings filter press - that money isn't needed right now as they would have already paid a deposit when they placed the order, the next part payment is likely to be due when it is ready to ship (about July next year) and the final payment will be due when it is commissioned and performing correctly (October next year). So there is no need to raise the money for this now, and by the time part payments fall due in July and October there should be plenty of money in the bank for this given the recent improvements in the performance of the plant and the interim tailings filter presses coming online in February/March next year taking processing capacity up to 80-85%. So that is 105,882,353 new shares that don't need to be issued.

$2,554,500 for Deferred vendor payments - no objections to paying this - we need to pay our bills. So $2,554,500 = 75,132,353 new shares that need to be issued. The interesting thing is that the MD signed a declaration on the 30th of September - so about five weeks ago saying that the company's cashflow projections showed that it had sufficient money to pay its bills going forward - and we have had a large increase in production since then. But anyway lets get the bills paid so issue the 75,132,353 new shares

$2,000,000 for Trafigura loan repayment - this loan isn't due until 2028, by then they should be able to make $2 million in a very short amount of time from production. $2 million is 58,823,529 new shares - we aren't paying massive interest on the loan, Trafigura are very supportive, so that is 58,823,529 new shares that don't need to be issued

$3,750,000 for Exploration - this is interesting, they say that they will commit $2 million for the next 12 months for exploration of Block 22B - OK. But then they want the remaining $1,750,000 for Daris East and Daris 3A5 - but we haven't been awarded the licences for these yet and anyone who has been here for 12 months or more will have probably figured out that these things take years to happen in Oman - a how long is a piece of string thing - and there is no guarantee that they will even be issued in the next 12 months. Given that there has been absolutely no mention of what they plan to do with operating profits from copper production (which should be turning a decent profit now after the latest production rate improvements) - if and when they do get these licences then exploration can be funded out of production profits. So that additional $1,750,000 for Daris East etc equates to 51,470,588 new shares that therefore don't need to be issued.

$1,535,500 for general working capital. Alara gets paid 80% of the value of the shipment within 7 days of the shipment leaving port, and the balance with small +/- adjustments once it has reached the smelter in China and been checked for impurities etc. So with the recent production improvements and the terms of the payment they have good cashflow now - so I don't see why this is needed, and as I mentioned earlier the MD signed a declaration about five weeks ago for the auditors saying that the companies cashflow projections indicated that they would have sufficient to pay their bills going forward - and that was after the recent shutdown but before the recent big production increases. So if they projected and declared five weeks ago that they had sufficient cashflow going forward and then we have had the big increase in production since then - they shouldn't need $1,535,500 for extra working capital should they? $1,535,500 = 45,161,765 new shares that don't need to be issued.
$119,000 - seriously if they can't fund this from the piggy bank given the increased production rates then they need to find a new job. $119,000 = exactly 3,500,000 new shares that don't need to be issued.

So effectively that summarises to being new shares being issued as follows -

• interim filter presses - 50,000,000 new shares
• pay overdue accounts - 75,132,353 new shares
• Block 22B exploration - 58,823,529 new shares

So that totals 183,955,882 new shares that would seem to be needed to be issued using the justifications that I have laid out above - or rounding up that is 41% of the amount of shares that they want to issue (ignoring the 5c in 2 years time options).

Everyone still with me so far?

So Alara currently has 718,087,541 issued shares, and the new actually needed shares (183,955,882 @ 3.4c bringing in $6,254,500) equals in simple terms 25.6% of additional new shares that are needed to be issued. So a 1 for 4 rights offer - totalling 179,521,885 new shares - $6,103,744 or roughly $150,000 less than is needed - the new interim extra filter presses will be online in February / March which will dramatically increase productivity and profit which can be used to make up the extra $150,000 given that the $2 million commitment for Block 22B exploration is over the next 12 months and isn't needed by the end of this month.

What does everyone else think of my reasoning and logic?

Phew that is a long bit of work!