Caracal Gold – A Cheap Winner or a Falling Knife ?

Small Cap Explorer Struggling To Pay Bills

Caracal Gold is a prominent figure in the gold exploration, development, and production sector, with its shares listed on both the LSE (London Stock Exchange) and FSE (Frankfurt Stock Exchange). The company boasts a substantial gold resource base, with over 1.3 million ounces that are JORC compliant. Their Kilimapesa mine is currently undergoing an expansion project, which aims to boost its production to 24,000 ounces.

The leadership at Caracal Gold is a blend of seasoned professionals who bring a wealth of experience from various facets of the mining industry. This includes expertise in geology, operations, finance, and capital markets. Their track record in the mining sector is commendable, showcasing their profound knowledge, expertise, and business acumen. These attributes are pivotal as they steer the company towards its growth objectives. Caracal Gold’s primary focus is on expanding its resource and production base while enhancing profitability. They have set ambitious targets, aiming for over 3 million ounces in JORC Compliant Resources and a gold production of over 50,000 ounces. However, the journey hasn’t been without challenges, as the company is grappling with significant financial hurdles.

In a recent RNS (Regulatory News Service) announcement, Caracal Gold shared some positive news. The company has successfully raised £92,750 through a Subscription process. This involved issuing over 30 million new Ordinary Shares at a price of £0.003 each. Additionally, subscribers from this process will receive one option for every two new Ordinary Shares they’ve acquired. These options come with an exercise price of £0.006 and will be valid until December 31st, 2024.

However, the issuance of these new shares is contingent upon the approval of a prospectus by the Financial Conduct Authority (FCA). Caracal is actively working with the FCA to get this prospectus approved.

In another significant development, Robbie McCrae, the CEO of Caracal, has entered into a Loan Agreement with the company. This loan, amounting to US $40,000, will span two years and will accrue an annual interest of 10%.

Simon Grant Rennick, the Chairman of Caracal, expressed his gratitude to the subscribers for their support. He mentioned that the funds raised would be channeled towards the Kilimapesa expansion funding process and to meet the company’s working capital needs. The company is also making strides in the Kilimapesa expansion funding process, a Joint Venture for the Tanzania project, and the FCA prospectus approval.

However, not all seems well at Caracal Gold. Reports suggest that the company has outstanding bills that remain unsettled. Furthermore, the CEO, Robbie McRae, has reportedly become unresponsive to queries about these unpaid bills. The company’s stock has seen a significant decline over the past quarter, reflecting the challenges it faces. If legal actions are initiated to recover the outstanding debts, the company’s stock could plummet even further. While Caracal Gold has the potential for a remarkable turnaround, it currently treads on thin ice, with its shares mirroring the inherent risks.