IMHO your posts have been anything but clear as to why there will be a cap raise. But maybe that's just me. I like to see the detail and not just backward looking statements. Using the most recent 3 quarter's costs certainly lends one to believe that they are going to run out of money. The question I am asking you is why (specifically) do you think they cannot improve their cost performance?
My opinion on a cap raise is:
There is some room for 2 quarters to turn the ship around and evaluate the cash position. That is Jun and Sep quarters. I make the assumption that the costs will improve sufficiently to break even at the very least for these two quarters. Management would be wise to throw everything they have at achieving these two milestones as a minimum. Given they have had a few hits on the regional exploration program, i would be happy if they dropped this expenditure for the two quarters - a saving of about 50 - 90 dollars an ounce perhaps. They can pick the program up later once stablised production and costs. If further issues come to light, then yes, a cap raising may be on the way. But as above i think we have some time before this becomes a "sure thing" as you have proposed.
Mining study:
There could be several reasons and focus areas for this item.
Trucking study - efficiencies of Tkm's/ number of excavators.
Stockpiling strategies.
Dewatering modelling.
Mining strategies/ costs to mine within different pits/ type of ore.
Overall they would be looking to gain some value from the study in ensuring they follow an independent review and thus gain some credibility for the next few quarters. It's all about delivering on a plan and TRY have not done that since June 16.
Should we make it through the next 2 quarters with a slight improvement in cash balance, there is no doubt Karouni should go on to perform well. Debt repayments come to end within 4-5 quarters now as well as further upside to build on later.
A market cap of under $40 million with $21 m cash and 1 million ounces in the ground seems like a good risk reward scenario for me. Even if the SP drops to 5c near term. I only hope we don't see a takeover because shareholders may not see the potential value lying here. I can imagine that producers with strong balance sheets but little in the way of resources may be thinking this could be of interest. SLR comes to mind in terms of needing ground but that is an unsubstantiated claim on my behalf. Just a thought.
TRY Price at posting:
9.5¢ Sentiment: Buy Disclosure: Held
