Minnow Oakdale burns through cash, chairman chips in
Graphite explorer Oakdale Resources is the latest junior to be questioned by the ASX over whether or not it will be topping up the coffers anytime soon.
The company had just $2184 in the kitty at the end of the September quarter and estimated a cash burn of about $23,030 for the December quarter.
Oakdale (ASX:OAR) is not expecting positive cash flow in the near term while it undertakes exploration at its namesake graphite project on South Australia’s Eyre Peninsula. However, the company — which has a market cap of just $1.25 million — is attempting to raise more cash.
“The company is taking steps to raise further cash to fund its ongoing operations and will continue to raise additional capital, as required, either through share placements or borrowings until such time as it is in a positive operating cash flow position,” Oakdale told the ASX.
Oakdale struck a deal in October that gave it the option to acquire control of a heavy mineral sands project in South Africa. As part of the deal, Oakdale is undertaking a capital raising.
Oakdale expects the funds to be sufficient to cover the cost of due diligence on the project as well as fund ongoing working capital and operations.
Executive chairman John Lynch has also agreed to stump up a $125,000 interest-free loan to the company.
“I have advised the company that I am also prepared to provide further ongoing funding if required in the future,” he noted.