ERL 0.00% 0.4¢ empire resources limited

miningman2012, your question asked on 9-07-18 deserves a better...

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    miningman2012, your question asked on 9-07-18 deserves a better answer than all the waffle that followed.

    Sadly, for whatever reason – lack of intelligence/intent to confuse, and contrary to Hot Copper guidelines there is a tendency among certain posters to repeatedly hi-jack threads and discuss unrelated subjects. Of the 17 posts on this thread, 6 can be related to your question.

    Your question is a good one and one that I have been asking (harping on about) – with one small correction – the original ASX Published forecast was for $7.6m Free” Cash Flow”NOT “PROFIT”.

    In context, with full acknowledgement to Investopedia, (www.Investopedia.com/terms/c/cashflow.asp )
    Cash Flow is defined as follows:

    Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow.

    If you visit the site you will see an example of a Wal-mart Cash Flow result and it includes all costs and expenses, including finance, before tax.

    In this perspective, without any further qualification by the directors of ERL we were entitled to believe that $7.6m positive cash flow would be available from the actual project. In fact, given the higher price of gold the amount should have been closer to $11.6m.

    On this basis it would not be unreasonable to assume that people bought shares in this emerging gold producer (ERL).

    Alas, at the time of arranging project finance it appears that the $7.6m was in fact “Fake News” because it appears the cost of financing had been overlooked and a figure of $2.3m was now to be deducted from the original published $7.6m (or $11.6m if pog = $1700/oz).

    Thus it appears, without question that, in the context of a forecast project free cash flow, any investor who purchased or held shares based on the original $7.6m (positive) cash flow forecast announcement was mislead.

    Add to this the “unbelievable” where an extension of the finance facility added another $1.7m – making $4m for a $7.5, facility for approx 12 months.

    Contrary to what has been said/implied dismissively on another thread, this was not the negotiations of a third party, “the JV”. Empire are/were the Manager of the JV and it is Empire who controlled the negotiations. Empire are responsible for this unbelievable and disastrous deal.

    The question has to be asked “if Empire stuffed up so badly on the Free Cash Flow Forecast and on the cost of financing, what else did they stuff up on?”

    You are 100% correct in your statement miningman2012, we have been mislead and “Management need to report ”


    (not speculators, guestimators, sooths , hypothosisers, philosophers, mystics – lets hear it from the horses mouth as an ASX release)

    Niterider
 
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