Interesting Q. I reckon if we didn't have this t/o bid we would be well north of 2c by now. Interesting comment in the last para...
"At 31st December the Company had A$251,000 cash at bank. As discussed above the Company has received US$1.54 million from gold sales since this date, with a further payment from the sale of approximately 275 ounces of gold awaited. The Company is now shipping gold doré weekly and believes that future production will generate sufficient cashflow to pay its operating costs."
Also according to my calcs thay have been receiving an average of $1,280 USD per ounce i.e... $5.5m revenue divided by 4,300 ounce.
So given the above comment in the quartley can we assume that operating costs are around the $1,280 and ounce?? If so can they get the average revenue to $1,500 per ounce or is it becasude of the purity of the gold (not sure)?
So the big question (and this seemed to be the crux of the directors argument as to why they are accepting the 2c offer from LG) is where do they get the funds to continue exploration.
They stated that the $5.3m costs for next quarter made up of...
Estimated cash outflows for next quarter: -Exploration and evaluation $500
- Development (including plant and equipment/ refurbishment) $2,450
- Production $2,200
-Administration $150
-Total $5,300*
and stated that... * The Company anticipates that operating and development costs for the next quarter will be funded by revenue from gold sales as discussed in the December 2011 Quarterly Activities Report
So lots of positives in that they are self funding in regard to development and production. But i guess the negative is $500k for exploration is miniscule and therein lies the main reason for the directors to accept the takeover bid IMO. i.e If they goto market for signficant cap raising then would be huge dilution in shares. But surely there's alternatives?? Perhaps thats what Centauras are thinking?
More to play out in this yet!!
GLA
Maddoc
SBL Price at posting:
1.5¢ Sentiment: Hold Disclosure: Held
