There is no question that the company required funding for Stage 1.5. The early choice was between debt and equity. Many people then got scared that they would be diluted to shit. The company responded that they were negotiating debt, that they were increasingly financing from internal cashflows and raised a little bit of money through equity in August. The company is kicking along, meeting its production targets and negotiating debt.
There is no doubt that the debt has been negotiated for some time now. But given that the debt is not to sustain operations or refinance existing debt, it's not urgent...unless we want the lenders to twist management's arms and to pay through the roof just to expand at whatever cost and to please shareholders who appear to have unwarranted anxiety.
Yes, the management provided its expectations around the time of the debt financing but, guess what, it's an uncontrollable metric for the management. The debt is decided by the lender not the borrower. I'd rather management exercise prudent capital management and maximise shareholder value than rush into some sort of average debt deal.
Further, given your criticisms: 1. Would you rather the company keep everyone in the dark about financing the expansion and not announce anything about that? or 2. Would you rather the company not give any timelines for possible financing of the expansion? or 3. Would you rather the company shelve the expansion to stage 1.5?
Those appear to me to be the only alternative scenarios. In case of all scenarios above, the share price would have likely been somewhere around the same mark as now if not lower.
Personally, I still suspect that there is undue pressure from "lenders" being exercised either to trigger a capital raising or to get debt through some sort of lucrative convertible note.
So the only way in my view is to keep producing and reinvesting cashflow into expansion.
What would you rather have the company do?
CXM Price at posting:
6.8¢ Sentiment: Buy Disclosure: Held
