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4/21/17

Crapstone Mining's (CS.to) debt: Parsing The Pylot

Here are the comments of CEO Darren "Drop The" Pylot in today's NR just out that announces amendments to its credit facility. IKN explains what he's saying in the blue type.

"This extension of our current low-cost, flexible credit facility, gives Capstone significant financial flexibility (we were in the shit) and right sizes the facility to meet our current and anticipated operating requirements," said Darren Pylot, President and CEO of Capstone. "Our current drawn debt of approximately $300 million is comfortably within this amended availability (uncomfortably high) and we have a cash balance of over $100 million (which should frighten the crap out of you, because it was over $130m at the end of 2016)."
"We plan to apply free cash from operations to reduce debt to a sustainable level (our debt is currently unsustainable) at commodity prices that reflect bottom of the cycle prices (if today's price are at the bottom why did we hedge our production?), which will provide an additional cushion of undrawn credit," continued Mr. Pylot. "This effectively addresses financing risk over the term of the facility (we are financially risky), which we believe will correspond to a stabilization and gradual improvement in copper prices."

Further questions?