``........flow-through..... $2,500,000.``
``......., while the proceeds of the private placement of Flow-Through Units will be used for eligible Canadian Exploration Expenditures ("CEE") including the diamond drill program at Lamaque.``
I don`t know what the CEE rules are exactly, but I have seen other companies treat CEE PP funding as restrictive cash, set aside for exploration work only. I believe for the PP investor to claim a CEE tax benefit, it requires the company to actually spend the money on exploration work. Again, I haven`t looked it up to see what the exact rules are, thus I am not 100% sure. Also, I do not know the documentation process that is followed, after the PP dollars are spent (i.e. if the company has to submit a document to show proof of exploration work performed before the PP investor is able to claim the CEE tax benefit).
It sounds like 63% of the $4M funding (at least initially) is targeted for CEE exploration work (a more aggressive exploration program as Lamaque).
12 comments:
I thought CMM needed the money for production ramp up? Are we fully financed? Why do we need money for exploration?
Guess no one can answer.
When I spoke to Peter Ball a couple of weeks ago I specifically asked about Century`s cash on hand. Peter mentioned that Century`s cash position was around $4.0 million (again, this was 2 weeks ago). That made perfect sense to me since the $5-6M financing was somewhat recent.
Thus, I wouldn`t be surprised if this extra $1.5M PP financing is to top off the existing cash in order to better position us with sufficient cash until we reach Cash Flow positive state.
And, therefore the extra $2.5 million is exactly as they stated - exploration work at Lamaque (including diamond drilling).
I agree P5, It would make perfect sense.
It would indeed be very positive if on Nov 15th they clarify that the last 2.5 mil was set aside for exploration because they had sufficient cash to ramp up production in Lamaque. However, we also have to consider that until they announce otherwise, they could continue making more general PPs and the flow through deal may have just been an oddball deal. I look forward to hearing what they have to say about this in a week.
As positive I am on the company, and as minute a percentage that the PPs are compared to the huge multiples we are undervalued, I have to admit it's hard to not be annoyed that the company is giving away discounted shares and cheap warrants while the price is so depressed. I would not mind as much if they announced progress, had a significant increase in price, and then did these a couple of these deals while the market was in euphoria mode.
On the conspiracy theory angle - This may easily explain why we have not been able to break 50 cents the last few weeks. It's quite possible that once this PP closes and the insiders are on board, they go ahead and run it up. I've seen it many times before. In fact, buying
RE
. . .In fact buying on the huge volume dip right after the PP is announced and before it closes has always worked out as a great entry point.
I also recall from a previous NR that CMM would conduct a 40000m exploration in 3 years as part of the money that they received in Jan 2010?
Wopster
For example:
There is this extremely tiny exploration company called Richmond Minerals (RMD). They reported some flow through CEE financing within their last quarterly statements, as restricted cash. From note 4 page 10 on their last quarterly statement:
``During the fiscal year ended May 31, 2010, the Company raised a total of $681,000 in flowthrough share offerings. At August 31, 2010, the Company had spent $235,434 of those funds on Canadian Exploration Expenditures (“CEE”). The balance of $445,566 remains on hand at August 31, 2010. As these funds are committed to CEE, they are not available for general working capital purposes.``
Exploration in the near-term is probably secondary to just ramping up existing resources but will be key for the long-term picture so that is good.
This is slightly off-topic, but I would love to see an announcement that they will be allocating funds to make the upgrades necessary to take Peru from 20k to 30k a year. This seems like relatively low hanging fruit that the market would like to see as well. Perhaps when the DB money is finally freed up.
RE
RE,
Forgot about that DE money! When does CMM get that again?
Just to check:
Have we gotten confirmation that the PP and flow-through have been filled?
Both have been filled already.
Thanks Yangzhh.
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