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clock Created with Sketch. 27/07/22
16:13
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Originally posted by VYR:
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The landscape has certainly changed since the capital raising and economic study were completed. The cost of funding the restart with equity instead of debt for existing shareholders is therefore 9c a share or $105m plus they loose 33% of the future income stream. The alternative is to pay a lender between $1.5m and $4.5m in interest.It's a no brainer, no capital raising gets a big tick from me even if we have to pay users rates to a lender. Debt comes with risk but given $350m of assets and $100s of millions of free cash flow $30m of debt is a very low risk option given the cost of removing that risk.. The alternative of delaying the start waiting for better times is also a big looser for existing shareholders. It seems to me that we need to get into production ASAP before the cash runs out or give away big chunks of the assets and future cash flow.
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Guys, don't take it personally, for now cash is king and I believe there will be better opportunities (with FCF) elsewhere. I'd rather be half glass empty here. Which one is better, CR or debt, if HGO goes on survival mode and cannot start producing copper and gold (Low copper price, increased expenditure on wages and energy, higher interest rates). Whatever happens, current market conditions are not in our favour at all. I agree with you, the sooner they start, the better.
