Cash Reserves Halve to A$470K as North Stawell Minerals Burns Through Exploration Funds
North Stawell Minerals Ltd reported a significant reduction in cash reserves for the quarter ending March 2025, highlighting a potential capital raising as exploration activities near completion.
- Net cash used in operating activities: A$133,000
- Investing activities cash outflow: A$400,200
- Cash and cash equivalents fell to A$470,000 from A$1.02 million
- Loan facility of A$4,000 fully drawn
- Estimated funding covers less than one quarter of current outgoings
Quarterly Cash Flow Overview
North Stawell Minerals Ltd (ASX: NSM) has released its quarterly cash flow report for the period ending 31 March 2025, revealing a tightening liquidity position amid ongoing exploration efforts. The company recorded net cash used in operating activities of A$133,000 and a substantial A$400,200 outflow in investing activities, primarily related to exploration and evaluation expenditures.
Cash and cash equivalents at quarter-end stood at A$470,000, down sharply from A$1.02 million at the start of the quarter. This decline underscores the cash burn associated with the company’s active drilling program and exploration initiatives at its North Stawell project.
Funding and Financing Details
North Stawell Minerals has a modest loan facility of A$4,000, which was fully drawn during the quarter. Financing activities resulted in a net cash outflow of A$13,400, reflecting transaction costs and repayments. The company currently has no unused financing facilities available, placing further pressure on its near-term liquidity.
Based on current expenditure levels, the company estimates it has funding to cover approximately 0.88 quarters, less than the two-quarter threshold often considered a minimum for operational continuity. This shortfall is attributed to the high costs of exploration and evaluation, which accounted for nearly A$400,000 in the quarter.
Outlook and Strategic Considerations
Management anticipates a reduction in expenditure starting April 2025, coinciding with the completion of the diamond drilling program and related exploration activities. This expected decrease in cash outflows could alleviate some pressure on the company’s cash reserves.
However, North Stawell Minerals has flagged the possibility of a capital raising to support ongoing exploration and operational costs if necessary. While no definitive plans or timelines have been announced, the company remains vigilant in monitoring its financial position and expenditure levels.
Notably, no payments to related parties were made during the quarter, and the company maintains a conservative approach to cash management amid challenging market conditions for junior explorers.
Implications for Investors
The current cash position and burn rate highlight the critical importance of funding strategy for North Stawell Minerals as it transitions from active drilling to subsequent phases of exploration or development. Investors should watch closely for any announcements regarding capital raising initiatives or changes in expenditure patterns that could impact the company’s financial health and share price performance.
Bottom Line?
North Stawell Minerals must navigate a tight funding window as drilling concludes, with capital raising likely on the horizon.
Questions in the middle?
- What are the company’s concrete plans and timeline for potential capital raising?
- How will reduced expenditure post-drilling affect exploration progress and timelines?
- What alternative funding options might North Stawell Minerals pursue if capital raising proves challenging?
