Capital spend is not a cost but it does consume cash. It is the...

Capital spend is not a cost but it does consume cash. It is the mirror image of D&A, which consumes no cash but is a cost. Calling them "all costs" is double counting and misleading.

D&A is irrelevant to AGO at this point in time and, at the current IO price, they are generating more then enough cash to cover capital spend.

I think that the share price is at 2.2c because there is still a 50/50 chance that AGO which breach debt covenants at the end of June, in which case all the equity will be taken over by the bondholders.

While AGO doesn't need a US$70 IO to survive, I agree they need something close to that to thrive and for long-term shareholders to recover any meaningful amount of their investment. I'm not making a prediction but nobody should rule that out - after all, three months ago how many of the experts were forecasting the price to be anywhere near today's?

While the recap will protect AGO from a covenant breach in June, most of the future upside will go to the bondholders. I think there is a reasonable chance, however, that shareholders will recover most of their investment in the cap raising.