The poor shareholders will have to read through 406 pages to get an accurate feel for what the current state of affairs is. Gave it a quick scan - the following bits caught my attention:
1) And I quote from both IFE and TRF's last financial reports "The auditor has issued their report with emphasis of matter on going concern which indicate the existence of a material uncertainty whether the entity would continue as a going concern and whether it would realise its assets and extinguish its liabilities in the normal course of business and the amount stated in the report". This was in December so add 3 more months of expenses to that view.
2) Valuation of merged entity's exploration assets ($18M). My gut feel (after scanning through the geology reports) is that there is not a single buyer out there who would offer them 1/10 of this at this stage of the exploration cycle. It is a totally theoretical number. Examples - Spot iron ore of $67 was used in the calculation (now $50) / historical transaction values (including through the boom years) were used as a benchmark. No mention (that I saw at least) of the significant minimum expenditure and landholding costs.
3) There is still a $2M value ascribed to historical exploration costs (accounting trick of little use in the current climate).
4) Fixed assets (value $9,7M). The main asset (the 80 man camp) is valued at $4.5M. This is the in-situ value so clearly not reflective of the true value. There is probably a 0% chance that anyone would buy it to use as is. The only potential buyers will break it up and move it. I know nothing about the potential break-up and relocation costs but guess the value could easily half in such an instance.
This is all smoke and mirrors. The real test is cash (of which there is little). They state that there will be no need for a cap raise and that funding will come from the R&D rebate and assets sales. The rebate will be gone in a flash (against the outstanding loan) so it will be down to assets sales. It is impossible for juniors with early stage exploration assets to raise any cash at the moment. If they cant sell the DMS, camp and / or the barge for meaningful amounts soon, then IFE will be under administration within the next 6 months.
TYX Price at posting:
2.0¢ Sentiment: None Disclosure: Not Held
