BSR 0.00% 1.3¢ bassari resources limited

I think they will be diluted more than that. They are...

  1. 1,825 Posts.
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    I think they will be diluted more than that.

    They are realistically going to need enough cash for the next 5 quarters before the income comes rolling in not allowing for any more substantial delays. The company has said nothing about finance in recent releases.

    Currently they have $600K

    If you use $750K required a quarter they are going to need;

    750 x 5 = $3.75M just to pay management.

    At 1 cent raising that's - 375 million additional shares
    I would also be surprised if they can debt finance more than 50% of the capex with the commodity sector the way it is. So they will need to raise an additional US$6M to fund the capex requirement.

    That's another $7,700,000 Australian or again at 1 cent -
    770,000,000 shares.

    So I see another 1,145,000,000 (1.145B shares) issued before they get to production.

    They already have 1,362,491,674 on issue so a tad over 2.5Billion shares on issue. That doesn't include the convertible note to BCM which if converted is another 245M shares.

    Even if they could achieve a US25M profit per annum ($57M @ A72c) They would need to pay down the 6M debt + 1M interest (as a guess) 18M (41M aussie 70% is theirs but they will keep more until capex paid back). The market wouldn't use a very high PE because of the low mine life (not including scoping study), goldies are out of flavor & they tend to get cost estimations wrong.

    I would suggest they will need to also;
    Try and buy out the other 30%. (even if it was in 10% alotments)
    Spend some major $$$ on exploration.
    Depending on SP look at a share buy back but only with spare cash and not to take away from exploration as the tenement looks great.

    I would estimate a MC of 50M or 1.8 cents a share. Maybe 2 cents if you allow for potential exploration upside but I doubt it the way goldies are on the nose at the moment.

    This is where a share buy back would be a great idea because they would be undervalued.
    I would personally rather buy at 1.8-2cents when finance is secured than buy now because the chance of higher dilution is also a concern. ie they raise at .009 instead of .01.

    I hope I am wrong with the above and that BCM can lend them some of the money and debt finance the rest through a bank.

    For the record I am not downramping just expressing my view. I will buy in when the time is right.
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