Disappointing is when you get a bad haircut. This is depressing.
I don't know where you all are getting your optimism from, but could you throw a little my way? Sorry to go all Debbie downer on you guys but I am struggling to see any way that crusader will climb out of this rut without some serious changes to management and our strategy. IF (and its a big 'if') the SPP is fully subscribed we would raise $3.3mil (less fees and administration, of course) and dilute all existing shareholders stakes in the company by 14%. 14% dilution and all we get is enough money to pay management for another ~15 months. Let alone other expenses. I am going to do some research and seriously consider just cutting my losses with this one, over the long weekend.
Lets look at some numbers and try to find out where all the money has gone. I am going off of the information in the Q4 2014 cash-flow report.
Estimated outflows for Q1 2015 (this doesn't take into account revenue from posse):
Exploration and evaluation - $1,000,000
Development - $100,000
Production - $4,400,000
Administration - $400,000
Total - $5,900,000
Note that in Q4 2014 "Administration" was also $400,000 so its safe to assume this estimation doesn't include Directors pays. Nice of them to leave that out. Im just going to assume it will be ~$310,ooo again.
New total - $6,210,000
Cash at bank - $3,400,000
Trying to find out how much profit we should make from Posse in Q1 2015. Can't seem to find anything. Looks like we made a $600k loss in Q4 2014. I am struggling to decipher this sentence from the quarterly report:
"Sales revenue for the quarter was $2.2M (unaudited) with a gross loss of $6ook (unaudited). Sales receipts, inclusive of taxes, were $3.0M (unaudited)."
Doesn't "sales revenue" and "sales receipts" mean the exact same thing?
On the cash-flow report under "cash flows related to operating activities" it says:
Sales receipts for Q4 2014 - $3.0M
Cost of production for Q4 2014 - $2.9M
Administration $400k
Development $40k
$3.0M less $2.9M $400k and $40k = loss of $340k
These numbers are shaky at best
The one thing that was said in regards to profits from Posse in 2015 is that they expect "greater financial performance" from posse over Q1 and Q2 2015, despite a lower overall selling price.
Total profit for 2014 from Posse was $6.2M
I guess the best I can do (being conservative because the further fall in the IO price) is divide that by 4? So $1.5mil profit from Posse in Q1 2015.
It would be nice if Crusader provided a rough production/earnings guidance like every other company on the ASX seems to do. Or maybe they have and it is just hidden in the clusterfuck that is their reports.
Lube up, I'm gonna be rough-
$6,200,000 outflows or ~$2,050,000 a month
$3,400,000 cash or ~$1,130,000 a month
$1,500,000 Profit from Posse or ~$500,000 a month
Based on that, at the end of Feb we should have $2,300,000. We had $2,000,000. So my numbers are kinda realistic? Continuing that, treasury would be $1,500,ooo at the end of march.
Crusader is bleeding money at the rate of ~500k a month. This capital raising, if fully subscribed (I highly doubt it will be) will bring treasury up to $4.8M. Unless Posse sales dramatically increase (IO just fell below US $50/tonne) OR we can secure a loan, we will need another cap raising in ~7 months. What if exploration expenses increase for Juruena or we need to upgrade the plant at Posse?? And $5mil debt to be repaid come 2016.
Having just gone through the Quarterly cash-flow report for Q4 2014 I have found our answer regarding the Mac bank loan. "Loan facilities - Amount available $5,000,000 - Amount used $5,000,000." I don't remember the directors disclosing that we lost access to/let go of the other $15mil of the finance facility. How convenient! I guess thats why we had to do this cap raising instead of adding to the loan. How inconvenient!
Since starting the drilling campaign at Juruena we have haemorrhaged many millions of dollars and we are only halfway done (5,000m out of 10,000 metres planned) according to the projects update on the 17th March 2015. On page 35 of the corporate presentation 6th Feb 2015 they said "Juruena is current focus of 8,000m drilling program - 2 rigs." Im not sure of why it changed? Is this going to change again?
What is the plan? Lets say we miraculously complete the drilling campaign at Juruena. Not just in our lifetimes, but also without running out of funds. We will have:
-Several pieces of land resembling swiss cheese
-Hopefully a resource estimate for (if I have interpreted this correctly) the 4 separate prospects at Juruena.(Querosene etc)
-Hopefully a BFS for Borborema or a detailed report of what our options are in regards to going forward with the project. Smaller project with the potential for expansion? or a joint venture with someone else to dig up the whole thing?
Then what?
Crusader will be:
-Broke
-Diluted
-Share price probably sub 20c
Where are we going to get the money for CAPEX of either Borborema or Juruena if Posse doesn't seriously up the cash-flow?
While I would really like to cut my losses and run, Crusader, through its 3 major assets has a LOT of potential. Especially if IO and gold turn around. I don't want to be that idiot who panics and sells right at the bottom. What frustrates me with these companies is it is so difficult to create an investment thesis when you are relying on only the information the directors chose to disclose. 90% of the time they only disclose information that suits THEIR agenda. What truly sucks is when my folks ask me how "the stocks" are going and I have to lie to their faces and say "yeah, ok" so they don't stress out; when between CCU,SLR and now CAS I have pissed away over a years wages. The despair of seeing your portfolio go down and down and down with no end in sight is something I wouldn't wish on anybody.
SLEAZY BEHAVIOUR-
Im sure some of the directors are OK and/or mean well. But overall
The way they keep repeating, in bold, the same two 'bonanza' intercepts in every goddam announcement is vomit-inducingly similar to the way SLR would always write, in bold,
7 million ounces gold in ground
10 million ounces silver in ground
something something tonnes copper in ground
in every. single. bloody announcement. To try and take the focus away from their piss poor management skills regarding both the projects and the companies finances. "Its ok guys, we are only going to dilute your holding 25% this time round, while we earn 6 figures and the company continues to go to sheet. But don't stress because look at all them ounces in the ground!". Thats the way I interpreted it and its the way I am taking Crusaders 'in your face' drilling results.
At this mines and money conference bullshit thing in Beijing I'm assuming they presented the corporate presentation from the 24th of march (on their website)? In the presentation they used the cash at bank figure of $3.4M from the 31st of december 2014. When at the time they knew the balance had fallen to $2M by the end of Feb, and probably even further. how can a person encourage investors to jump on board when they know there will be a capital raising the following week, at a significant discount? Morally bankrupt? While they didn't actually lie it is still incredibly misleading. Having said that, I know nothing about that mines and money thing and how it works. Just seems dodgy
On page 11 of the quarterly activities report for Q4 2014, under "Juruena gold" they say "Crusader acquired the project in mid-2014 AND IS FULLY FUNDED to complete a drilling program capable of defining a maiden resource." With $3.4M in the bank it is safe (id say 100%) to assume the directors KNEW that was a load of bullshit. Then in the next announcement on the 17th of March 2015 they changed their wording to "Crusader acquired the project in mid-2014 and is completing a drilling program capable of defining a maiden resource."
I would recommend all shareholders read this link:
http://www.asx.com.au/documents/about/abridged-continuous-disclosure-guide-clean-copy.pdf
"an entity must disclose all information concerning it that it becomes aware of from any source and of any character, if a reasonable person would expect the information to have a material effect on the price or value of its securities."
"The test for determining whether information is market sensitive and therefore needs to be disclosed .....
under that section, a reasonable person is taken to expect information to have a material effect on the price or value of an entities securities if the information "would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of" those securities."
I feel like a bit of an ass blaming everything on the directors but at the end of the day they are the only people TO blame. And their shady behaviour during these times of uncertainty leaves a lot to be desired.
