As predicted the second payment has been delayed as has the...

As predicted the second payment has been delayed as has the report from Erocsplan regarding the projects. No surprise there. But we do have another updated equity facility which will result in a big overhang in the medium term.

What is interesting is something i touched on in an earlier post. That is, where is the cash coming from for working capital in the short term? Given Fortis didnt have $6million to their name, how did they manage to loan money to Jian resources for the first payment?

According to their last quarterly, Fortis had $3.568 million in the bank. Since then they have received $2.4 million for the Madam Cheung shares. Total $5.968 million.

They then loaned Jian $6 million USD for the first payment. Assuming after currency transaction they got about 1USD for 1AUD, then how did they have enough cash to loan Jian?

Also we can assume a cash burn per quarter of a few hundred thousand in working capital (directors/staff wages/office/travel etc), so how is company managing? Costs in the last quarter would be significant given travel/due diligence/legal costs and the engagement of Ercosplan. According to the half yearly they also had trade payables of close to $300k. Not sure when they are due.

There may be a chance that they have taken out a loan in the short term. Possible. But from where exactly? And should it be something that has to be announced to the market?

I previously suggested that they may have drawn down from the initial $10m Gem facility. This however appears unlikely. Firstly, no appendix 3b has appeared to confirm that shares were issued to Gem. Secondly, the initial Gem facility was superseded by the subsequent $60m facility which in turn was superseded by the $140m facility. According to the announcements at the time, none of these were finalised and have not received shareholder approval as Fortis says is needed.

Apologies in advance if i have missed something or overlooked cash which they have received from elsewhere. But if the above is correct then this may well be a serious issue. It should be a matter which is cleared up by the quarterly cash flow report in the next two weeks.

Certainly still lots of questions and not a lot of answers. The company is promising again to call an immediate shareholder meeting. Waiting...