Saw some buzz around XTC and thought I'd give it some quick midnight DD. Given the progress of this company, seems like it is no longer at "basement bargain" prices after the recent run-up. Also seems like the recent preso was to help build its presence in the lithium investment community.
Reading the latest half yearly report and accounts + investor preso...
recommend doing so if you haven't already- XTC will soon need to exercise the option on 3 concessions signed on 29-Nov-21 (6 month exclusivity, ends at end of May)
- No actual exploration has happened, this will come after they sign the options. That means the board must make a decision based on local and historical data (there's a list of DD items they'll look at in the half yearly)
- Recent pivot to lithium also seems like they'll be moving away from their previous gold prospecting in WA
- There's also some random tenements in South Korean held by XTC's South Korean subsidiaries (seems like a weird corporate structure?)
If you look at the amounts they need to pay if they were to sign those options, you can be pretty sure they're dropping that WA gold exploration and doing another capital raise to actually fund the lithium exploration...and they only have 1 guy on the ground over there (Mr Fernandez and his professional services company)?
They need a total of A$21.4m cash by May-23 ($A22.7m by Nov-23) if they were to sign all 3 options (not including issuance of 1b shares + issuance of A$13.3m worth of shares)...but they've only started DD on one option and have <2 months left to complete all 3?
Rita/Rita 1Option- US$40k/A$53k to get DD - DD report has been received
- US$100k/A$133k payable by Aug-22 once signed
- 1b shares to be issued once signed - at $0.01, that's A$10m worth
- If signed, must also pay US$1.0m/A$1.3m by May-23
- If signed, must also pay US$1.0m/A$1.3m by Nov-23
La SofiaOption- US$55k/A$73k to get DD - DD report doesn't seem to have been received yet
- US$460k/A$613k payable by Aug-22 once signed
- If signed, must also pay US$0.6m/A$0.8m by Nov-22
- If signed, must also pay US$0.9m/A$1.2m by May-23
Luz Maria Option- US$320k/A$426k to get DD - DD report doesn't seem to have been received yet
- US$2.18m/A$2.9m payable by Aug-22 once signed
- If signed, must also pay US$3m/A$4m by Nov-22
- If signed, must also pay US$7m/A$9.3m by May-23
- If signed, must also issue US$10m/A$13.3m worth of shares (number of shares TBC) by Aug-22
Assuming they do give all DD's a tick:
- XTC has A$11.5m cash on hand based on recent investor preso
- If the board wants to raise ~$15m @ 10% dilution, this would be around when XTC is ~$150m market cap. (IIRC, 10% dilution is the standard ASX limit on raises that don't require further shareholder approval)
Definitely an interesting story but think might pass on this one and keep it on the watchlist. Best of luck!
(20min delay)