AuKing Mining Limited - Quarterly Cash Flow Report for Q2 2024
AKN (AKN) Share Update July 2024 Wednesday 24th
AuKing Mining Limited Releases Quarterly Cash Flow Report
AuKing Mining Limited (ASX: AKN) has released its quarterly cash flow report for the period ending 30 June 2024, detailing significant cash outflows and financing activities.
Instant Summary:
- Net cash outflow from operating activities: $881,000.
- Net cash outflow from investing activities: $94,000.
- Net cash inflow from financing activities: $803,000.
- Cash and cash equivalents at the end of the period: $113,000.
- Short-term loan agreement with Evolution Capital for $750,000 at 10% interest.
- Insurance premium funding arrangement with IQumulate Premium Funding Pty Ltd at 12.05% interest.
Operating Activities
During the current quarter, AuKing Mining Limited reported a net cash outflow of $881,000 from operating activities. This includes payments for exploration and evaluation in Tanzania amounting to $207,000 and staff costs of $201,000. Administration and corporate costs were $400,000, and interest paid amounted to $73,000.
Investing Activities
The company also reported a net cash outflow of $94,000 from investing activities, primarily due to payments for exploration and evaluation at Koongie Park. There were no proceeds from the disposal of entities, tenements, property, plant, equipment, or investments during this period.
Financing Activities
On the financing front, AuKing Mining Limited saw a net cash inflow of $803,000. This was achieved through proceeds from equity securities issues amounting to $450,000 and borrowings of $406,000. The company incurred transaction costs related to equity securities issues of $35,000 and repaid borrowings of $18,000.
Cash Position
As of 30 June 2024, the company had cash and cash equivalents of $113,000, down from $283,000 at the beginning of the quarter. The effect of exchange rate movements on cash held was minimal, contributing an additional $2,000.
Financing Facilities
AuKing Mining Limited has a short-term loan agreement with Evolution Capital, with a facility limit of $750,000 at a fixed interest rate of 10%, maturing on 18 August 2024. Additionally, the company has an insurance premium funding arrangement with IQumulate Premium Funding Pty Ltd for $51,152 at an interest rate of 12.05%, repayable over 10 months ending February 2025.
Future Cash Flow and Funding
The company expects higher operating cash outflows in the upcoming quarter due to project activities at Myoff Creek (Canada) and Mkuju (Tanzania). To fund its operations, AuKing Mining Limited has completed a $150,000 placement and plans to proceed with a rights issue entitlement offer to existing shareholders, with Empire Capital Partners Pty Ltd appointed as Lead Manager for any shortfall.
The significant cash outflows and the company's reliance on external financing highlight potential liquidity concerns. The short-term loan agreements and upcoming rights issue will be critical in maintaining operational stability. Investors may view the increased project activities as a positive sign of future growth, but the immediate financial strain could impact short-term stock performance.
Investor Reaction:
Analysts have expressed mixed reactions, with some concerned about the company's liquidity and reliance on external financing. Others are optimistic about the potential growth from ongoing projects in Canada and Tanzania.
Conclusion:
Investors should closely monitor AuKing Mining Limited's financial health and the success of its upcoming rights issue. The company's ability to manage its cash flow and secure additional funding will be crucial in sustaining its operations and achieving long-term growth.