Ann: Significant Mineralisation Beyond Reserves at Williamson, page-29

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Drugo

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09/03/19

22:55

Post #: 37710381
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Originally posted by brianchu82: ↑

I think putting things into perspective, beyond a potential capital raising in this coming quarter, the company is not likely to go into administration. The company has a manageable debt load despite the vast chorus of people here who chant that there is imminent death ahead. Let's actually look at companies that actually were taken into administration and look at their debt balance prior:

- Kingsrose (2016 end of financial year: Cash - $1.5m, Debt - $10.3m) Ok this one looks pretty comparable though Kingsrose has smaller scale operations. End result - Recapitalisation at 4c per share for around $10m prior to 2017 financial year end. Company now in net cash position and about to produce from second mine, albeit operations being still small scale.

- Aurelia (2015 Sept when Glencore tried to put them into VA: Cash - $6.7m, Debt - $105m). The company had a refinancing to extend repayment of the loan to stave off bankruptcy and it was trading with negative book equity. Company started to generate positive net operating cash flows for the 2016 financial year but still was in negative book equity position until 2018 half year after it raised $70m equity to acquire Peak mines and repay the Glencore debt. What happened since is history... we all know how Aurelia has gone

- Millennium (I talked about that before)

Anyway, while many are still crying for blood here, I think you have a case to be frustrated. But to keep crying for the company to be moving inevitably to bankruptcy, I think that is still a real stretch. The company's debt load is currently less than $25m. They have convertible debt funding and also sulphide concentrates to sell.

One thing that the board and management deserve to be given a hearty beating over is that they relied on too much debt funding and not enough equity capital when they were constructing the mine in anticipation on production. But hindsight is indeed overrated. I think there are a few tough quarters ahead, but I doubt very much the company is heading to voluntary administration. I could eventually be proven wrong and this post will haunt me. But it is ok. I can live with the shame on this call.

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Totally agree. Loking at total debt to cash and cashflow projections and they are still proving up reserves. (although they could a little opportunistic). If a big investor comes or good financing this could be a 5-6 bagger to start. Then see what happens from there.
I think there is a lack of confidence in management and projections for the near term though. This region has also had its problems. However, the $AU gold price has never been this high to cover marginal operations. If they hit 200K/ann in the next year or so I will not be posting on this site as I will no longer be worried about investing. Just spending.

BLK Price at posting: 2.9¢ Sentiment: Hold Disclosure: Held
8 Upvote

2 Great analysis

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Ann: Significant Mineralisation Beyond Reserves at Williamson, page-29

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