Balance sheet still stressed The main issue is cashflow and the over gearing The hedge book after deliveries January and February is still -$340m marked to market Currently reducing cashflow by $60m this Qtr Debt + Hedge book currently - $440m Macquarie end of financial year is March 30th, and credit will want certainty given they have already had Calidus blow up on this year. The risk of another capital raising is high.
(Extract from a leading equities broker early March)
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The $A gold price is up another $500 since early March!
~196,000 ounces had been sold forward some time ago at ~$2800 (but spot gold in Australia is now ~$5000 … so this contract could be around $400 million underwater by my rough reckoning.
Macquarie were also owed $100 million
balance sheet repair must clearly be front of mind for all ….
the company also needs another commercially mineable asset to feed the mill and reduce sole asset operational risks
(Vivien to the South seems the most logical to me, but I doubt the owners would be looking for shares as the consideration)
BGL Price at posting:
$1.15 Sentiment: None Disclosure: Not Held
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