In this update of 31 October, the company advise that have loans totaling $47 million. The first of these loans of $31m matures on the 24 th Feb (ie must be repayed then).
They will have around now (end of quarter) just $5 million cash, based on the figures in the quarterly report see Page 4. (ie cash of $9m at start of quarter, outflows of $21.7m and that $16m loan drawdown).
The update suggests funds will be received with the imminent shipments, however Galaxy received up front payments in April, May this year ........totaling about A$18m, for which they have not delivered any product.
I imagine a not too happy customer, having made payments 6 months and still no product. Will Galaxy deliver their initial shipments to this customer, or another party and generate some cash. ?
They are hoping to arrange another loan to cover the $31m soon.
It is a billion dollar company now. I do not think it unreasonable to go to the market for a modest capital raising. Get it over with prior to Xmas and clear the deck of these loans. We will see what happens.....however it is a bit messy.
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Remember that header $125m revenues v $1b cap. I simply went to their Swiss presentation. It was the company who advised production of 160, 000 tons of concentrate at a satisfactory price. They firstly have to fill that binding contract of 60,ooo tons, locked in at $600 per ton.
They are 6 months behind and I am not too sure in a good position to negotiate price rises.....but anyway lets say the balance comes in at $800 per ton. Adds only another $20 m in gross revenues....or $145m v cap of $1 b. That is very poor.
http://www.galaxyresources.com.au/media/announcements/43cgy5npw26tcp.pdf
