Folks, The capital raising was necessary. With the 917k cash...

Folks,

The capital raising was necessary. With the 917k cash they had at the end of June, they needed to pay 9.5m of debt for the half year ended 31 December 2013. This is on top of finding an extra 3 to 5 m as security for the outstanding loan. So all in all, 12- 15 m cash required just for loans. They also need to pay the leases on equipment hire, interest on loans and ramp up of golden gate. Development golden gate circa 1.5m, exploration another 2m, you are looking at a grand total of approximately 15 - 18m. They then need to pay another 10m off in 1st half of next calendar year.

Based on 44koz of gold for dec half, you are looking at Cashflow from sale of gold of circa 23m. If production falls to 37koz, then it is 20m cash flow. This is on hedge price of 1582 for 20651 oz and the remainder at spot gold of 1330 with aud at 0.94.

So it is a bit close for comfort and you can see why they needed to raise a small amount, particularly if there are ramp up issues at golden gate.

Psyber