Ann: Trading Halt, page-34

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TimothyTMLim

59 Posts.

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21/01/16

19:58

Post #: 16844817
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Originally posted by triage ↑

specky

Well if the capital raising is for $85m at $2.10 it must surely be for something other than pouring more money into phase 1 of Olaroz (?). The recent updates clearly represent that they were moving towards resolving most of the issues with getting Olaroz up and running profitably. For them to now fess up that that was not the case would be astounding imo.

If they are now admitting that they need to sink additional tens of millions into the phase 1 of the project then that would likely have two consequences imo. First, there is no way that institutions would pay $2.10 to buy into a festering sore, when the recent share price was south of $1.40 on exactly the same worries. And secondly, there would surely need to be resignations at the highest level, as not only would they have botched the commissioning process but they would have been less than frank about how badly they have botched it. I don't see that the institutions would be willing to back a management group that stuffed things up so badly over such a period of time (assuming that phase 1 does actually need $50 or $60 mill to have a hope of being viable).

Given how in hindsight the borax operation looks to have been a great deal for Rio perhaps it is also requiring some additional funds (?).

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Though the timing looks rather strange, wouldn't it be better off confirming it has achieved the breakeven for phase 1 - self-sustaining operation - before CR for other operations?

ORE Price at posting: $2.54 Sentiment: Hold Disclosure: Held
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