The restrained and helpful comments by BP are noted and appreciated. Rightly BP mentions an element of negativity, and I checked that. It appears in the going concern section of the H1 report.
The references to ability or inability to continue as a going concern are perfectly normal and cautious in the development stage of new projects, and they refer to the amount spent in H1 and the need tor further funding.
There is a comment in the report about the Directors having funding confidence The relevant reporting may be useful :-
Quote Going concern The consolidated financial statements have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the normal course of business.
The Group has cash outflows from operating and investing activities of $36,442,000 for the period ended 31 December 2021. At 31 December 2021, the Group had cash on hand of $56,882,000 (31 December 2020: $12,426,000). The Group has net working capital as at 31 December 2021 of $66,651,000 and outstanding commitments of $14,254,000 relating to construction of the Korean metals plant, Dubbo FEED, Dubbo land acquisitions, and exploration obligations all due within 12 months (Refer Note 15).
Based on the Group's cash flow forecast, the Group will require additional funding in the next 12 months from the date of the half‐year financial report to enable the Group to continue to realise its strategic business activities and meet all associated corporate, exploration, construction, and development commitments over the period.\
As a result of the above, there is a material uncertainty that may cast significant doubt on the entity's ability to continue as a going concern and therefore, that the entity may be unable to realise its assets and discharge its liabilities in the normal course of business.
The continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the Group being able to raise additional funding which may include: ● Completing the US$250m framework agreement during the first half of 2022 with the South Korean consortium for a 20% interest in the Dubbo Project as announced on 21 July 2021; ● Raising additional equity capital, the Directors are of the view that the Group will be able to raise further equity capital as they were successful in raising approximately $91.9 million in equity (before costs) during April 2021; ● Raising debt financing for the Dubbo project. ASM has appointed Australian and New Zealand Banking Group Limited (ANZ) as a debt financial advisor based on ANZs experience and strong relationships in Australia and Korea, including with Australian and Korean export finance agencies. ASM is currently working closely with ANZ to secure funding for the development of the Dubbo Project financing commitments; or ● Satisfying Export Finance Australia (EFA) conditions precedent to access $200 million in finance support for the Dubbo Project as announced on 28 June 2021.
The Directors are satisfied that at the date of signing the financial report, there are reasonable grounds to believe that the Group will be successful in these endeavours and that the Group will be able raise sufficient capital.
The financial report does not include any adjustments relating to the amounts or classifications of recorded assets and liabilities that might be necessary if the Group does not continue as a going concern. Unquote
Recherche comment :- All of the above is prudent and in many ways a statement of the obvious, with interesting coverage of issues. As many here are saying new progress announcements and funding actions will be crucial for all of us who are interested in ASM. I like the responsible, professional and and reasonable tone of the half yearly report and look forward to more news. My comment is not intended as buying or selling advice, and I await more news with great interest.
ASM Price at posting:
$8.06 Sentiment: Hold Disclosure: Held
(20min delay)