What additional capital expenditures and financing will be required to explore and develop the expanded Howells Lake property, and how might this impact the company’s balance sheet and cash flow?
Capital needs and financing outlook
The 67 % land‑addition at Howells Lake essentially resets the company’s development‑budget baseline. A typical early‑stage antimony‑gold project of this size requires a three‑phase drill programme (initial 2,000 m core, followed by infill and bulk‑sample drilling) plus a geophysical survey, permitting work and a preliminary metallurgical test‑work package. Industry comparables suggest an out‑of‑pocket spend of $12‑$18 million over the next 12‑18 months to bring the expanded area to a NI 43‑101‑compliant resource estimate. Critical One has signaled that it will raise the balance‑sheet capital through a combination of a non‑funded equity placement (≈$10 M) and venture debt facilities (≈$5‑$7 M), supplemented by potential Ontario mineral‑exploration tax credits and the federal Critical Minerals Streamlining Act incentives.
Balance‑sheet and cash‑flow impact
Assuming the full $15‑$20 M capital plan is financed as outlined, the company’s cash‑position will be diluted by roughly 15‑20 % post‑placement, pushing current liquid assets from the low‑single‑digit‑million range back up to the $20‑$25 M level. Debt‑capacity will rise modestly, but interest coverage will be thin given a projected cash‑burn of $1.5‑$2 M per month until a resource is announced. Until then, the firm will remain a cash‑flow negative explorer, making its share price highly sensitive to drilling results. Traders should watch for the first drill‑hole intercept release (expected Q4‑2025); a positive high‑grade antimony/gold discovery could justify the dilution and trigger a short‑term rally, while a weak outcome would pressure the stock further, especially as the new financing tranches become due. In the meantime, the stock may trade in a risk‑reward corridor of $0.30–$0.45, with upside contingent on the resource upgrade and downside limited by the near‑term cash‑burn runway.