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tooli

1,084 Posts.

31/10/14

19:54

Post #: 14219402
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Originally posted by zog ↑

Tooli I have some sympathy with you position but have questions on some of the detail. You say that SLR burnt $17m last quarter - this is true from pg 6 of the last quarterly, however the components of the cash burn are unclear to me and may not be net outgoings over the next quarter. These are:
1. Capex ($6m) includes relocation of power equipment from the Murchison and the NCM payment for Majestic of $1.025M - say $2m total
2. Care & maintenance ($6.3M) was a one off payment of $4.7M for redundancy & $1.6M for Lakewood - this item should not be there in the next quarterly.
3. Working Capital movement ($8.4M) consists of outgoings of $2.5m (bullion) and $5.9m trade creditors. Hopefully this will not be repeated in the next quarter particularly with 3,588 ozs of bullion refined and not sold on hand.

In short SLR should be better off next quarter by about $16.7m making them about breakeven over the month if the PoG stay roughly the same and the benefit of existing bullion (worth $5.28m) in hand (i.e not sold) should make them cash flow +ve (just).

Agreed they will have Capex down the line but there should be a lot of pressure to cut their cloth and keep their head (just) above water - danger is PoG goes down further and US$1,180 PoG is broken or the A$ appreciates.

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Zog bottom line is its a fine line they are trading at and a few million here and there will not make this company survive.POG as I write AUD 1330,thats dangerously close to game over.
It may come as a shock to some but its already happened to some this year there is no warning it just happens and that is the last you here,no letter no nothing,dont say you were not warned.

SLR Price at posting: 27.5¢ Sentiment: Sell Disclosure: Not Held
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