9,699,213I've been thinking about the financial position of the...

9,699,213I've been thinking about the financial position of the company, and the things we need to get done.

As per a recent interview with Kerry from Small Caps / Making Money Matter (video below) Paul said there was about $1.1m AUD in the bank.

Before the raise earlier this year, we had 72,190,210 shares on issue.

After the raise (and currently), we have 94,982,814 shares on issue, and we also raised about $3.2m (if I recall correctly, CBF looking it up).

As I understand it, there are 9,699,213 options outstanding at $0.25c.

If 100% of options were converted, it would mean about $2.4m AUD, and the extra 10m options would take us to about 104m shares on issue.

80% of options being converted would mean about $1.9m AUD, and about 102m shares on issue.

In theory, between what's in the bank and the potential conversion of options, the company would have more than enough money to complete the PFS and maybe even do some drilling.

Being realistic, I think it is unlikely the company will have enough money to complete the PFS with the cash on hand - assuming no options are converted.

This leaves the question of how much will be needed to do the items on the wish list (all estimates in AUD):
- Salaries and keep the lights on for the next 12 months - $750k?
- Complete processing of the assays from the central and northern zones - Maybe $250k?
- Complete the PFS - maybe $600k?
- Drill Satrokala - depends on how many meters of drilling, maybe $300k - $600k?
- Assay Satrokala - also depends on how much drilling, but maybe another $250k - $400k?

All up I think we'll need about $2.4m to get everything done. And we'll need some money in the bank.

Given we have about $1m, I would say we will need to raise another $2m - $4m

Let's go with $3m. Paul has been fairly prudent with the funds raised so far, and I guess it is a question of at which price will the raise be done?

This is also a question of news flow.

The mining code and subsequent licence are the biggest things that would shift the share price in a sustainable way.

Could this news happen before the March or even July... I dunno, but the sooner it happens, the more likely the price is to be higher.

To be honest, I am terrified that a raise will be done at a low price, and I consider anything under $0.25c a low price.

$3m at $0.10c = 30m new shares, or about 125m shares on issue, or about 31.5% new shares / dilution.

$3m at $0.15c = 20m new shares, or about 115m shares on issue, or about 21% new shares / dilution.

$3m at $0.20c = 15m new shares, or about 110m shares on issue, or 15.8% new shares / dilution.

and finally, but unlikely unless the mining code gets ratified and we start the licence application.

$3m at $0.25c = 12m shares on issue, or 107m shares on issue, or 12.6% new shares / dilution.

Obviously 125m shares on issue isn't catastrophic, but the fact remains that if existing holders want to maintain their current percentage holding, they will be up for a fair chunk of money, and that is fine if people can afford it and are inclined to invest, otherwise we will need to wear the dilution.

For me a $3m raise would mean I would need to invest about $65k to maintain my holding. A very tough ask given my financial situation, and hard to justify given the share price under performance and frustrations of the last 12 months.

I am not saying I won't invest, but it likely will not be the full amount.

There are a lot of people who are likely frustrated, some good progress, some decent news, and maybe some information or news on a potential off take - even a non binding agreement, or even better, a binding agreement would put a rocket under the share price, but this would likely be dependent on the mining code getting sorted.

That bloody mining code...

As an FYI, my original estimates had us completing the PFS with the cash on hand and the mining code being ratified and our share price being closer to $0.50c, and a number of shares being converted. On reflection, I think many people will wait to as close to the last minute as possible to convert their options where the price is hopefully much higher, and that would mean they would need to sell less of their shares to convert.

Anyways, let's see what happens in the next 3, 6 and 12 months.

I reckon June / July will be crunch time and when the raise will likely happen.