Savannah Goldfields reported a challenging quarter with significant cash outflows but bolstered its position through a $15 million equity raise, setting the stage for a planned restart of gold production.
- Operating cash outflows of AUD 4.7 million in Q3 2025
- Investing outflows focused on exploration and evaluation
- Net financing inflow of AUD 5.16 million from equity and convertible debt
- Cash balance at quarter-end of AUD 624,000 with $7.5 million in unused loan facilities
- Company progressing towards recommencing gold production with expected cash surpluses
Quarterly Cash Flow Overview
Savannah Goldfields Limited disclosed its cash flow performance for the quarter ending 30 September 2025, revealing a net cash outflow from operating activities of approximately AUD 4.7 million. This outflow was primarily driven by exploration and evaluation expenses, alongside staff and corporate costs. Investing activities also saw a modest outflow of AUD 229,000, mainly allocated to ongoing exploration efforts.
Financing Activities and Capital Raising
On the financing front, Savannah Goldfields secured a net inflow of AUD 5.16 million, stemming from proceeds of equity issues and convertible debt securities. Notably, the company announced a substantial $15 million equity capital raising in late August 2025, with the first tranche of over AUD 4.1 million settled during the quarter and the remaining tranche completed shortly after quarter-end. This capital injection is critical in underpinning the company’s near-term operational plans.
Liquidity and Loan Facilities
Despite the cash outflows, Savannah ended the quarter with AUD 624,000 in cash and cash equivalents. The company also maintains access to unused financing facilities totaling approximately AUD 7.5 million. These facilities include a loan from an entity associated with the company’s chairman, offering an 8% interest rate and unsecured terms, and a secured loan from a third party at a higher interest rate. Together, these provide a financial buffer as the company transitions towards production.
Outlook – Recommencement of Gold Production
Looking ahead, Savannah Goldfields is advancing plans to restart gold production activities in the current quarter. The company anticipates generating material cash operating surpluses from its initial processing campaign, which will include previously mined and stockpiled material. This operational pivot is expected to improve cash flow dynamics significantly and support the company’s broader business objectives.
Strategic Implications
The successful capital raise and imminent production restart mark a pivotal moment for Savannah Goldfields. While the company currently faces liquidity constraints with less than two quarters of funding based on current outgoings, the infusion of capital and planned operational ramp-up provide a pathway to financial stability. Investors will be watching closely to see if the company can translate these plans into sustained cash flow improvements.
Bottom Line?
Savannah Goldfields’ capital raise and production restart plans set a critical test for its financial resilience in the coming quarters.
Questions in the middle?
- Will the recommencement of gold production deliver the expected cash surpluses on schedule?
- How will Savannah manage repayment of its loan facilities given their maturity dates and interest rates?
- What are the risks if the second tranche of the capital raising encounters delays or shortfalls?