Burn Rate Concerns

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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geoprof

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Burn Rate Concerns

posted on Aug 29, 2008 12:10PM

Back when the corporate video was released in early August, I calculated and reported an average burn rate of approx $2 to $2.5M per month based on the stated $40M cash on the balance sheet. Now that the financials are out, we find some $54M in cash listed on the balance sheet as of April 30, 2008. Hence, in roughly 3 months that balance has been reduced to only $40M, implying a burn rate now of approx $5M per month.

With a planned budget of $60M for McFaulds' properties planned for 2009, we have a more immediate need for increased investment $ than I originally thought. I know that when the last PP was announced at $4 the actual SP was at about $3 and then continued to rise briefly to over $6, even with the dilution.

Now comes my concern. What are management's contingency plans? More dilution at embarassing prices? Optioning a % of the properties to a major, thereby diluting our interests? Other possibilities?

Whatever it takes, I sure hope their primary goal is to boost the SP as quickly as possible. More frequent release of assays might help as well as a listing on the big board.