indigestion from the bull, page-3

"However, in the past six months it has taken over Integra Mining and has been commissioning the Murchison Gold Project. During this period, its cash balance has reduced dramatically and outstanding bills have more than doubled. It looks like it has bitten off a bit more than it can chew and may suffer indigestion for 2013."


There is no evidence of this at all.
IGR was a non cash transaction and is currently cash flow positive. There was a one off stamp duty fee that was expected and from here on there are synergies.
It would have been preferable to see it cash flow positive in Dec 2012 half rather than CF neutral under IGR control but at the current sp I think that disapointment is factored in. From here upside is more likely on the turnaround under new management. Similar comments were made about Wesfarmers takeover of Coles. Wesfarmers were not even Supermarket specialists but had excellent success turning the business around. SLR have taken over a business in which they do have expertise and next door to their own operation in a region that they have plenty of experience with. IGR management were clearly better at discovery than production. The asset is excellent with strong open pit grades and good underground grades and I can't see any reason to believe they won't be very successful in turning it around.
Murchison was always expected to use up $70 mill of cash and has not gone over budget.
The significant debt facility has not been used.

What is there to back up those claims that SLR has bitten off more than it can chew?
They haven't even had time to complete their optimisation study yet and are currently processing stockpiles profitably.