Sorry to weigh in with an opinion no this ongoing discussion (argument) about whether AGS left it to the last minute (and too late) to seek funding. Firstly, that's clearly what the Q legal team are trying to say, and given we've only seen their line of questioning so far, our view has probably been biased in that direction. From my knowledge of matters previously released, there's a different picture. For instance, the original marketing plan current as of early 2014 was for sales of 1.5 million lbs during CY 2014, with about 1 million lbs ready for sale at end 2014 due to the gap between production and sales. From memory, the sales price was also projected at US$49/lb. So AGS's 25% share of this income would have been about $20 million give or take depending on exchange rate at time of sale. No doubt someone will point out that the 2015 budget required $26 million fro AGS, however, note that the $20 million would have been received in 2014, with income ongoing through 2015 as sales continued. In this scenario there should have been no financial difficulties requiring capital.
So the question really is, when did AGS go from expecting the above scenario to the predicament they're currently in? Was it their own fault, or Quasar's?
It seems in early October, AGS were told that product was shipped in August, and then more in September - see ASX announcement 6th Oct 2014. Were they expecting imminent income from this shipment at that time? And then the 'new' production and marketing plan was presented to AGS on 6th November (see ASX release 7th Nov 2014). At that point, they were told that the plan was stockpiling, not sales (including for the amount already shipped), and thus that income was more than a year away. Clearly now capital was desperately required. The timeline can then be seen from ASX annoucements that soon followed. Over the following week, AGS asked Q to sell it's share and then terminated the sales agency when this request was refused. And in the following weeks AGS cancelled the sales process and then elected not to contribute to the 2015 budget (thus diluting). Then of course came the 8c CR that devastated the share price.
Looking at that timeline, I think AGS have a case. The cross-examination of AGS directors wasn't pretty, but did it disprove AGS's version? Well, I'm not sure. I'm not blowing balloons up in anticipation of total victory. But neither am I running for the exit. I think I'll prudently change my sentiment from buy to hold though :/
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