I have been sensing a CR also. I even asked the question in the...

First 4 Last

Share
Profile

Follow
shanebat

25 Posts.

3

19/09/24

09:16

Post #: 75738951
Share

Originally posted by LTDTrader: ↑
This has been a much raised on this topic on this forum, but not called out separately this point. Perhaps a reason for the recent weakness in share price which we would all like to understand and some in the know better about than the rest of us.

WGX creditor position appears to be significantly out of line with its peers, and in fact the combination with Karora would appear to have combined with a counterparty with an equally bad creditor position. WGX have not historically had such a creditor position, but the past 12 months has seen their creditor position rise dramatically and I do wonder if in the washout of this Karora deal they will need to clear this through a chunky equity raising to shore up their balance sheet.

The most comparable company i can compare with to WGX is RMS, granted WGX combined with Karora is now larger, however something does not look quite right here. Why have WGX creditors been increasing so significantly over the past 12 months, and they have combined with Karora who appear to have an equally high creditor position on a relative basis. If anything, one would have thought that as owner operator, WGX creditor position may be lower than others that have large lumpy contractor payments to make that WGX do not have as owner operator.

Pulling the data below, you can see that WGX on a standalone basis was increasing its payables in a big way last year pre-Karora. When combined with Karora, they would appear to have a creditor balance of $210m...significantly less than their pro forma cash position based on WGX merger presentation....how do they intend to normalise this position?

Perhaps there is another answer to this, or maybe WGX have been managing their cash flow to appear as if they appear are making free cash flow but in fact are building a creditor balance which they intend of paying back with an equity raise now they have completed the Karora deal? Hopefully not.
Company Westgold Karora Westgold + Karora Ramelius
1 Creditor Balance (A$M)

2 Jun-24 148 62 210 66
3 Dec-23 117 66 183 72
4 Jun-23 79 46 125 70
5 Dec-22 72 71 143 80
Expand
I have been sensing a CR also. I even asked the question in the online meeting and they quickly bailed from answering. I think something is in the wind and we could be seeing sub 2.20 prices again if they went ahead with a CR. BGL recently did the same thing by not letting the market have a reasonable idea of what they were thinking and the share price has been severely punished for it. I also hope this does not become the case but I have some serious concerns.

WGX Price at posting: $2.65 Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

Reply

Top Stories

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

What's causing the cost-of-living crisis, and how to navigate it

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

M4M

Macro, Norden set up transport solutions initiative for West Pilbara

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war