Auking Mining Reports $353K Operating Cash Outflow, Raises $275K Equity in Quarter
Auking Mining Limited reported a challenging quarter ending December 31, 2024, with significant cash outflows and a critical need for new capital to sustain exploration activities in Tanzania and Cloncurry.
- Net operating cash outflow of $353,000 for the quarter
- Cash reserves dwindled to $34,000 at quarter end
- Completed partial placement of rights issue entitlement shortfall
- Board approved placement of 60 million shares to strategic investor
- Exploration activities contingent on securing additional funding
Quarterly Cash Flow Overview
Auking Mining Limited (ASX: AKN) disclosed its Appendix 5B quarterly cash flow report for the period ending 31 December 2024, revealing a tightening liquidity position amid ongoing exploration efforts. The company recorded a net cash outflow from operating activities of $353,000, reflecting continued expenditure on corporate and administrative costs, as well as exploration-related expenses.
Cash and cash equivalents at the end of the quarter stood at a mere $34,000, down from $58,000 in the previous quarter, underscoring the urgency of securing fresh capital to maintain operational momentum.
Investing and Financing Activities
Investing activities saw a net cash outflow of $1.94 million, primarily driven by payments related to exploration and evaluation at key projects including Koongie Park and Myoff Creek. This reflects Auking’s commitment to advancing its asset portfolio despite financial constraints.
On the financing front, the company raised $275,000 through equity securities issuance during the quarter, contributing to a year-to-date total of $1.255 million. Notably, Auking recently completed a partial placement of the rights issue entitlement shortfall and secured shareholder approval at its December 23, 2024, extraordinary general meeting to place an additional 60 million shares to a strategic investor. Discussions remain ongoing to finalise this transaction.
Funding Challenges and Strategic Outlook
The report candidly addresses the company’s precarious cash position, with available funding sufficient for only approximately 0.1 quarters based on current outgoings. Auking acknowledges that its ability to continue exploration activities, including the proposed earn-in opportunity at the Cloncurry Project and planned drilling at Mkuju in Tanzania, hinges on successfully raising additional funds.
Management has indicated that if funding is delayed or insufficient, these projects will be postponed until financial stability is restored. The company remains optimistic about ongoing financing discussions and is exploring multiple avenues to bolster its cash reserves.
Governance and Related Party Payments
The quarterly report also discloses payments of $81,000 to related parties, primarily comprising the Managing Director’s salary and superannuation. Auking maintains transparency in its governance disclosures, consistent with ASX Listing Rule requirements.
Additionally, the company holds a short-term loan facility of $809,000, including a $750,000 loan from Director Peter Tighe, with a 15% annual interest rate and maturity in March 2025, further highlighting the reliance on internal financing mechanisms.
Bottom Line?
Auking Mining’s immediate future depends on securing fresh capital to unlock its exploration potential or face delays in key projects.
Questions in the middle?
- Will Auking Mining successfully complete the strategic investor placement and when?
- How will delays in funding impact the timeline and viability of the Cloncurry and Mkuju projects?
- What alternative financing options is Auking considering beyond equity placements?
