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m0ngy

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15/11/15

11:24

Post #: 16398800
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Originally posted by zog ↑

Probably worthwhile considering some of the implications of latest CR announcement

Current shares on issue = 199,000,000

They can only place 15% of these shares w/o shareholder approval = 29,850,000 shares

at say 5c = A$1,492m

The 25c options are well under water 76.9m and will not be converted. So in July 2016 shares on issue will be 228,850,000 but company will not have the $19.225m is would have received and a Market cap of A$11,442,500 including a debt (to Chimera) of A$5m and cash of approx A$1.5m. Hopefully they could get more cash from customers if the make a delivery from the accumulated stock (if there is any) from production.

Critical to get:
- income from clients for the stocks
- production costs up to match (exceed? costs)
- get the at least A$1.5m from placement (to remain solvent)
- get the remainder of the A$20m loan from Chimera (to get up to 7 T/day capacity) and with improvements to pre-screening, grinding & bagging get up to 21,000 T/yr.

Maybe it's as Mungy says the CoP is higher than the sale price or production (or is constrained by some other limitation (i.e water?). As SH management needs to explain where the bottlenecks are and the affect on production (and CoP) of removing each of the bottlenecks (i.e. pre-screening, grinding and finally bagging). Pre-screening bottleneck would imply that RoM grade is low and better material (and improved production) could be obtained by mining the arterial graphite (or higher grade zones) rather than using stockpiles (which may have been left in 1993 due to low grade). What contacts/commitments are their for mining services/equipment.

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Great analysis zog regarding mining the mining the arterial graphite (or higher grade zones), that is exactly what CR focussed on. He told me he had developed a mining technique that involved identifying the arterial and high grade and selectively mining it. It's a worry that even that didn't seem to work.

VXL Price at posting: 11.5¢ Sentiment: Sell Disclosure: Not Held
2 Upvote

0 Great analysis

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Ann: Trading Halt, page-17

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