i agree i was just trying to come up with worst case.Obvioulsy...

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Dreamer4

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19/05/22

14:58

Post #: 61503343
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Originally posted by BerserkWarrior: ↑

Thanks for the reply & for the E & A Ltd heads-up, I'll have a look.

If they needed to plug a capital hole with a CR, I'd think it's going to go down further- a lot. They should be ok though cutting it fine. Wet weather historically is done in QLD by now & Covid contact restrictions have eased so it would be unlikely these issues would be as bad going forward unless we're dealing with mutations/new viral waves etc. If it came to needing capital I'd much rather they sell say 3-4 of the rigs they've purchased (which are highly sought after atm) to give them a capital bridge/buffer rather than dilute at these levels which would be a big mistake I think. If they chose to raise at these levels I'd reconsider my position, that would be managerial ineptitude. They've kicked some dreadful own goals but a raising at these levels would be a shocker. This is going to sound crazy but it's true..... the return they'd get by selling those rigs and expending it all on repurchasing equity at below 32c would give them a better (& far faster return) than putting those rigs to work.

They've demonstrated pre Kirkalocka they can run this well- cash flow was healthy, top & bottom line was growing & debt was getting paid down. There's no reason they can't be doing it again with increased scale. Let's see them do it

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i agree i was just trying to come up with worst case.

Obvioulsy this set back will be felt on the balance sheet - but if EBITDA ends up at 50 to 55 mil all be it 6 months later then 28 cents is going to look very cheap.

these small mining services companies find it hard to predict revenue as there is much that isn't in their control and obviously being small 5 to 10 more or less drill rigs operating makes a huge difference to the bottom line, given their fixed cost.

MSV Price at posting: 31.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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