OPERATIONS

Calima cuts into directors' salaries in tough quarter

Tommy Lakes keeps company well-positioned

  TommyLakes keeps company well-positioned.jpg

TommyLakes keeps company well-positioned.jpg

 

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The Canada-focussed company said it has $3.6 million in net working capital as of April 30. 

As of April 1, Calima's directors agreed to convert their executive and director fees to shares, saving the company $280,000 per annum it said. 

The company estimated it will have roughly $1.9 million on March 31 2021, based on its average monthly cash burn rate. 

The company had a net cash flow from operating activities of $41,000 during the quarter, net cash from investment of $431,000, and $97,000 from financing activities. 

Despite the dire economic outlook, the company noted the acquisition of the Tommy Lakes compressions facilities and associated pipelines and infrastructure during the quarter for $750,000 in the north of the Calima Lands, British Columbia, as a win. 

The gathering pipelines, compression facilities  can transport up to 50 million cubic feet of gas per day, and 2500 barrels of condensate and are estimated to be worth around $85 million.

The pipelines connect to the Nova Gas Transmission Ltd pipeline system, the 3848km Alliance Pipeline, and the 2858km T-North section of the BC Pipeline in British Columbia. 

The new pipeline connections mean oil and gas produced from the company's Calima Lands project in the famous Montney Formation now has access to diversified markets throughout Canada. 

The company said it remains focussed on looking for dance partners or funding for the project, appointing former Macquarie-man Chase Edgelow in an advisory capacity. 

The facilities have an annual holding cost of A$400,000.

"Despite the market turmoil, Calima is well positioned to go forward with substantial primary gas resources, a gas and liquids facility connected to sales markets, reduced overheads and a working capital position that will support business until early 2022," the company said. 

Last month Calima president Michael Dobovich said the Calima Lands could be brought into production within six to nine months and the company would be "poised to benefit" from market improvements. 

When market conditions are expected to improve is anyone's guess. 

This afternoon Calima shares had plunged 17% to 0.5 cents. 

 

 

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