Surefire says it can keep the lights on, even with just $11k in the bank
Minnow base metals explorer Surefire Resources has again attracted the attention of the ASX over its ability to keep the lights on.
Surefire (ASX:SRN) had just $11,000 cash in the bank at the end of the September quarter and an estimated cash burn for the current quarter of $65,000.
During the last quarter, the company secured a $200,000 loan with Vargas Holdings, a company associated with director Vladimir Nikolaenko.
Back in early October, the ASX quizzed the company over whether its annual report followed accounting standards after its auditor flagged financial issues.
Surefire has again reassured the Australian bourse that it will remain in business, saying that it will soon be adding $3 million to its coffers by way of a rights issue and placement.
The company is “absolutely confident” it will bank the full amount and has got brokers onboard to fully underwrite the capital raising, Mr Nikolaenko told Stockhead.
“There’s no reason why it won’t occur,” he said.
Surefire expects to lay its hands on the cash by the end of January and that it will be sufficient to keep the company going in 2018.
“It’s going to be dependent on the speed of activity, but that certainly will get us through the 12 months,” Mr Nikolaenko said.
Surefire also expects to raise further cash throughout the course of next year with the issue of options in the upcoming capital raising.
“There are mechanisms within our capital raising with the added incentive for shareholders if they choose to subscribe to stock during the course of the year, then that’ll fill the coffers,” Mr Nikolaenko said.
If all the options are exercised, Surefire will raise somewhere in the vicinity of $12 million over a two-year period, he added.
The company is raising the cash to fund exploration on its Kooline lead-silver project in Western Australia.
Surefire plans to update the market next week on its strategy for the project, which so far has had little attention.
“Unfortunately the company has had the project for 12 months and little to nothing has been done on there,” Mr Nikolaenko said.
“The reality is lead has never been at a higher level than it currently is. It’s running about $3300 to $3500 a tonne. The grades are extremely high up in the Kooline. There’s a lot of work to be done.”