Originally posted by triage
kojak - how am I being pessimistic? I'm simply saying that there appears to have been a timing anomaly in Troy holding so much gold as at 30 Sep 18 and that it can be construed as being misleading to suggest that the A$14.6m for cash and equivalents is a permanent base on which Troy can only add to.
The simplest explanation is that for whatever reason a shipment of gold from the mine happened in early October rather than late September. And given that the company has explicitly stated it is attempting to fix its balance sheet I doubt that once the proceeds from the sale of the shipment came into their bank account they would sit on it rather than pay off some of their debt (both secured and unsecured).
Also, look at the sales figure for the September quarter, at $16.3m it is almost half of the corresponding figures for the March quarter ($30.6m) and for the June quarter ($27.1m). It's not as if they did not produce similar amounts of gold across all three quarters. Again that just points to a timing issue imo.
Well, production was just not sold before end of quarter. A couple of days delay can have lots of reasons. If gold had been sold within the quarter they would have had A$11m in cash instead of A$1.6m. Also technically there was no debt repayment within the quarter. There was after quarter end, A$4.2m. Still leaves the company with nearly A$7m cash in the bank plus ca. A$4m gold inventories and most of that probably in the non-sellable form. The interesting thing is not the cash level but the change in cash from last quarter. It was A$9.5m or 2 cents per share.
I have already published a guesstimate of December quarter showing it will be cash-flow neutral even after the having less production because of the Smarts 3 situation, paying A$1.5m for exploration and paying a massive US$4.2m debt repayment. So the A$6-7m cushion they now have might be completely used to pay down trade creditor debt. End of June trade debt was A$28.5m with the reasonable level being perhaps A$8-10m.
In 2019 there will be the last US$4m debt payment to Investec and then Troy will be free to use all cashflow to repay the remainder of the trade debt, will take probably only two quarters.
But to be honest the debt levels here are a distraction now, exploration results will be far more important. Any production after mid to late 2019 will directly benefit shareholders again.
