I just did some calcs on required payment for the senior debt and required additional funds to redeem the CPS in full to prevent dilution (easy calc as its bullet loan and not amortising):
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
USD 50M Senior Debt facility |
|
|
|
| 2 |
Principal: |
$ 50,000,000.00 |
USD |
|
| 3 |
AUD/USD |
$ 0.70 |
|
|
| 4 |
Principal: |
$ 71,428,571.43 |
AUD |
|
| 5 |
Year |
interest |
Interest payment (AUD) |
Annual min allocation for principal |
| 6 |
1 |
10.0% |
$ 7,142,857.14 |
$ 10,204,081.63 |
| 7 |
2 |
12.5% |
$ 8,928,571.43 |
$ 10,204,081.63 |
| 8 |
3 |
7.5% |
$ 5,357,142.86 |
$ 10,204,081.63 |
| 9 |
4 |
7.5% |
$ 5,357,142.86 |
$ 10,204,081.63 |
| 10 |
5 |
7.5% |
$ 5,357,142.86 |
$ 10,204,081.63 |
| 11 |
6 |
7.5% |
$ 5,357,142.86 |
$ 10,204,081.63 |
| 12 |
7 |
7.5% |
$ 5,357,142.86 |
$ 10,204,081.63 |
| 13 |
Total: |
$ 42,857,142.86 |
interest |
|
| 14 |
Grand Total: |
$ 114,285,714.29 |
interest and principal bullet paid at 7 years |
|
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
CPS |
|
|
|
| 2 |
Principal: |
$ 40,000,000.00 |
USD |
|
| 3 |
AUD/USD |
$ 0.70 |
|
|
| 4 |
Principal: |
$ 57,142,857.14 |
AUD |
|
| 5 |
Year |
interest |
Interest payment (AUD) |
Annual min allocation for principal |
| 6 |
1 |
5.0% |
$ 3,571,428.57 |
$ 14,285,714.29 |
| 7 |
2 |
5.0% |
$ 3,571,428.57 |
$ 14,285,714.29 |
| 8 |
3 |
5.0% |
$ 3,571,428.57 |
$ 14,285,714.29 |
| 9 |
4 |
5.0% |
$ 3,571,428.57 |
$ 14,285,714.29 |
| 10 |
Total: |
$ 14,285,714.29 |
interest |
|
| 11 |
$ 71,428,571.43 |
interest and principal redemption at 4 years |
|
|
For the USD$50M senior debt, SRQ needs to allocate between A$15M to A$19M p.a. for the next 7 years to meet the bullet payment at term end. For this to happen, we need minimum around A$0.30/lb surplus year round between our all-in production cost and the Cu price. The last qtr's cost numbers are a cause for concern with very high C1 than usual, as well as their depreciation / amortisation which incorporates the higher capex. I'll watch out for this coming qtr to see if there is a pattern to worry over. Seeing the numbers above though, it puts to perspective that without the restructuring agreement that has just been concluded, there's no way in hell could SRQ repay a senior debt totalling USD$110M. However with the debt repayment haircut, SRQ will be hard-pressed also to generate sufficient funds with its current mining operations as is to redeem the CPS (need an extra ~A$18M p.a. on top of fund allocation to senior debt repayment assuming they leave to the end of 4 years to redeem all).
One thing I probably got out of the telecon was the verbal suggestion by Andre that all they needed is to capital raise USD$42M to redeem the CPS in full. Take note the extra USD$2M, which is 5% interest if capital raising is undertaken within a year's time. Let's hope this is the case in a year's time, but there's plenty of hoops to jump before this can be done. I guess it's where PAG's debt facility comes in handy to prove up the possibility of multi-mine operations within the tritton area, and get our market cap to a high enough value before doing a share consolidation and relisting so that instos can participate in any capital raising. This I think is the only way considering only instos would have such funds (forget retail), but the market cap is too low to allow insto participation.
