Pacific Bauxite grilled over waning cash levels
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Junior explorer Pacific Bauxite has been pinged by the ASX over a lack of cash flow and dwindling funds.
Pacific Bauxite (ASX:PBX) had around $1.6 million in the kitty at the end of September and expected a higher cash burn of $911,000 for the December quarter compared to $572,000 previously.
Shares hit an intraday low of 4c on Thursday — a 24.5 per cent drop on the previous day’s closing price — before recovering marginally to 4.5c.
In its response to the ASX, the company said it is not trying to raise cash at the moment.
“The company recognises it will need to raise further cash to fund its operations sometime in the future, however, no steps have been taken to raise additional funds in the immediate future as the company does not believe it is the appropriate time to do so,” Pacific Bauxite said.
“The company notes its strong relationships with capital providers, and is confident of its capacity to raise additional funds when required.”
Pacific Bauxite estimates it will have over $700,000 in cash at the end of the current quarter and is confident it has sufficient capacity to issue shares and raise more cash when required.
A decision has not yet been made on when Pacific Bauxite is likely to go to market, company secretary Suraj Sanghani told Stockhead.
“We’ll do it at a time that the company feels is appropriate and that’ll take into account numerous factors — the market sentiment, how far progressed we are in our project and news flow,” he said.
The company is confident though that it will remain in business.
Pacific Bauxite is undertaking exploration at its direct shipping ore-prospective bauxite projects in the Solomon Islands.
Bauxite is the key ingredient in aluminium and alumina production. Exploration for the type of bauxite deposit found in the Solomon Islands has increased in recent years, largely due to growing alumina demand in China and the Asia Pacific region.
Pacific Bauxite has flagged plans to expand its portfolio to include Malaysian mining operations.
The company also has stakes in iron ore and gold projects in Australia.