rock and a hard place

BMN has pulled in its horns a fair bit of late - EPL 3346 (Sawkop River) was allowed to lapse and not renewed. Etango (EPL 3345) was renewed for two years but at a reduced size of 250km2 - to include all current target areas but nonetheless a 50% plus reduction in land area.

Cash burn is somewhere around $1m a quarter and cash reserves at 30 June 2013 were $3.816m. The loan note that is with RCF has a maturity date of 31 March 2014 - and with a conversion price of a shade over 28c I very much doubt they will be interested in taking equity instead of cash. As matters stand that would mean BMN has to come up with $8m for a bullet repayment to meet the 31 March 2014 date.

I also note that the loan note has as one of its conditions (presumably as a covenant) that BMN must maintain cash or cash equivalents of not less than $1.25m. Whatever comes first - a potential breach of covenant brought about by cash burn or a demand for repayment - irrespective ss/dd and market fundamentals etc BMN has some fairly pressing financing issues to address in the very near term. In the absence of a new arrangement we are looking down the barrel or either receivership or serious dilution ? Rock and a hard place it would seem.

It would be good to get a sense of direction from the company well in advance (i.e. in the next few weeks / months).