- Junior gold explorer Navarre Minerals (NML) is the latest company to claim the COVID-19 pandemic has had no “direct impact” on operations
- However, in response to the crisis, the company is winding back and reducing drilling programs in Victoria, while striving to preserve cash
- This, of course, begs the question as to what constitutes “direct” and “indirect” impacts
- Regardless, Managing Director Geoff McDermott said the company’s balance sheet is strong enough to weather the coronavirus storm
- Shareholders are playing it safe for now, with Navarre shares declining almost 10 per cent today to trade for just under seven cents each
Australian junior gold explorer Navarre Minerals (NML) is the latest company to claim the COVID-19 pandemic has had no “direct impact” on business.
However, announcements like Navarre’s this morning beg the question: what constitutes direct versus indirect impact from the virus?
Although Navarre said there have been no direct impacts to operating activities, the company also highlighted the winding down of drilling programs to reduce its operating “footprint” in direct response to the coronavirus crisis.
In fact, Managing Director Geoff McDermott said the company has had to take measures to preserve cash and protect employees while the virus rages on.
“The unprecedented circumstances that have unfolding globally over recent weeks are having a significant impact on our industry. However, we are being pro-active in our approach to negate these impacts,” Geoff said.
“Our priority is to minimise the risks from COVID-19 to staff, contractors and the communities in which we operate. To achieve this, we are implementing a reduction of our operating footprint to minimise workplace interactions,” he explained.
As such, if reducing diamond drilling at its Victorian gold projects, preserving cash, and winding down greenfields aircore drilling is not a “direct impact” to company operations, what is?
While perhaps Navarre sees “direct impact” as actual infections in the company, shareholders likely see any change in operations due to COVID-19 as important.
Given Navarre’s $8.7 million cash on hand at the end of December and planned $3.9 million in spending during the current quarter, any impacts to company cash flow could be significant.
Nevertheless, Geoff assured investors the company has enough cash in the bank to weather the coronavirus storm.
“These are extraordinary times, that no one could have foreseen, but Navarre enters this period of uncertainty with a strong balance sheet and unfinished business in converting our recent discoveries into potential economic mineral deposits,” Geoff said.
Importantly, Navarre said it would be reporting drilling results in coming weeks with more detailed financial information in its upcoming quarterly report slated for the end of April.
Still, shareholders seem tentative in the meantime, with shares down 8.11 per cent in mid-afternoon trade and worth 6.8 cents each.