Havilah's Developing Projects, page-15

April quarterly showed $914,000 cash and expected cash outflows (ECOs) for July quarter of $4,920,000.

Option conversions since April quarterly
1/6 654,064 at 30c = $196,219
2/6 91,023 at 30c = $27,306
9/6 545,760 at 30c = $163,728
19/6 567,637 at 30c = $170,291
23/6 562,621 at 30c = $168,786
30/6 1,889,044 at 30c = $566,713
5/7 584,642 at 30c = $175,392

Total option conversion $2,498,228

Cash at end of April quarter + proceeds from option conversion - ECOs July quarter = $914,000 + $2,498,228 - $4,920,000 = -$1,507,772

By their own estimates in April they'll have a $1,507,772 deficit for the July quarter

Even if I use, say, $5/t mining costs and $20/t processing costs that's $1,515,000 expended for mining and $2,120,000 for processing.

Total $3,635,000 mining/processing costs (my guess) verses $2.8 million of gold sales and that doesn't account for about $1.1 million in exploration and admin costs that were forecast for the quarter plus unspecified amounts for plant upgrades. With nugget inventory of $0.5 I get deficit for quarter of $1.435 million (which is about the same as above).

From what I understand it's a shared risk and shared profit agreement. Mining contractor delivers ore to processing plant at their own risk and HAV process ore at their own risk, resulting profits are shared 50/50 (that's the way I understand it, could be wrong). In this case given no profit for the quarter HAV's responsibility for the processing costs (at $20/t my guess) = $2.12 million. Based on this I get a surplus of cash of $120,000 for the quarter (including nugget value) not including any costs for plant upgrade. If they didn't do the planned $0.5 million of exploration that could be as high as $720,000 not including amounts for the plant upgrades.

Which ever way you slice it and dice it they are pretty low on cash.

Also if you look at ore mined to date verses the ore processed to date there doesn't seem to be any ROM ore available at end of July meaning the contractor's risk burden is running pretty high having made no money in the July quarter and having to deliver ore to the processing plant over the next quarter. This quarter really needs to lift.

I'm surprised they haven't raised capital already.

Eshmun