- The CR presentation (released 25 May) showed an anticipated post-CR proforma cash position of AU$37.7m (Slide 12), after expected loan repayments and repaying overdue outstanding invoices, yadda, yadda. That would have related to the time period of around mid-June (i.e. upon completion of the CR) - roughly two weeks prior to EOQ reporting.
- The June quarterly, with a reporting date some two weeks after completion of the CR, reported actual group cash held on hand balance as at 30 June of AU$31.4m (p.6).
That's an actual shortfall of ~$6.3m only two weeks after CR completion. Given the very short time frame between those two dates, it certainly appears to be a material difference.
Where did it go? Well, an only moderately deeper dive reveals it largely went to MacBank because it appears management underestimated the total cost of retiring both debts by combined ~$6.5m!!
Supporting Calcs: Estimated Use of Funds, per Investor presentation (Slide 8): - Estimated full retirement of MacBank debt.........$25.2m - Estimated full retirement of Zeta debt................ $8.9m Total estimated debt retirement outflows...............$34.1m
Actual debt retirement outflows (per quarterly report, p.6): - Retirement of senior (MacBank) debt................$32.5m (~$7.3m more than budgeted!) - Retirement of subordinated (Zeta) debt ............ $8.1m (~$800k less than budgeted) Total actual debt retirement outflows....................$40.6m
Difference (actual vs. estimated).......................$6.5m additional outflows.
By my reckoning that overrun basically wiped out the cash buffer, meaning that the remaining cash reserves are (at best) already fully allocated and those items need to come in at or under budget. There is a chance I've been a wee bit generous and the allocations are already underdone. Based on past form, one would be forgiven for taking this view.
It's also worthwhile remembering that nowhere in the CR was there any allocation set aside for working capital requirements on the other side of the restart. So, another CR round is basically locked-in for, say Q1 next year.
Little wonder there's not a lot of love for PAN atm.
Management really needs to start kicking some goals to rebuild some credibility. Delivering the vent shaft access drive and associated vent shaft raise bore on time and on (revised, revised) budget would be a good start.
(20min delay)