I agree that continuning to run the operation as is, is the preferred outcome. The only issue would then be trying to find the $90M for the underground mine development in a tough market.
However, I'm suspecting that the motivation for the DML management team to entertain is the debts.
In the short term meeting the Sedgman payments schedule has proven difficult and may have been the reason for November slipping into negative cash flow. The Cupric prepayment to look at our books will stave off this short term cash flow problem.
In the longer term (31 December 2014 !) DML is in default on the Re-profiled debt for not having fulfilled one of the conditions subsequent, being an approved underground development plan. They could also miss the second subsequent condition of raising equity for the Zeta underground mine, sufficient to finance development of the first underground Zeta mine to an operational stage "on or before 31 December 2014). The Cupric purchase could handily discharge this obligation should the lenders withdraw their (patient) support of DML.
DML Price at posting:
1.6¢ Sentiment: Buy Disclosure: Held
