Money mine mention, page-61

When building up a business, the trickiest/challenging/riskiest point is that initial transition from explorer/developer to producer because one has to take on debt to fund the development while there is no income to service the debt load. Every mining/energy company has to go through it at some point (ok, maybe not every company - some may never produce anything and will just burn shareholder capital).

Once WE2 was a hit, there was always going to be an explosion in the capital requirement to further explore and appraise the discovery. One successful exploration well doesn't make a producing field. It needs time, money and some element of fortune. STX was very fortunate with Walyering in that development was relatively smooth and the gas is clean, so we now have one producing asset that is generating decent cashflow to support servicing/pay back our debt. In a short space of time, Walyering development debt will be repaid and we will be left with an asset that is producing a lot of surplus cash that can then be used to fund other explorations and development debts (such as for WE). The hiccup we had was investing all those millions in SE2/3 that will now not generate any future cashflow.

Until a company has cashflow producing assets whereby its cashflow generation meets/exceeds its cash spend needs, there will always be potential need for additional CR. It's not a bad thing, just part and parcel of investing in the energy/mining space.

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