Yowza, yowza, yowza. Too bad that the loan aghreement didn'r specify $2,400 (U.S.) per ounce as the price for the prepayment, hmmm? Then Eric Sprott's prediction of $2,400 (U.S.) would have been realized...and he would have been paid it (albeit in shares) by BGM. Wonder why the company decided to prepay that last 4,168 ounces at $1,600 (U.S.)? It could have waited until next year and probably paid it at $1,200 (U.S.) per ounce. 4,168 ounces at a saving of $400 (U.S.) per ounce is, at today's exchange rate, would over
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halcro wrote:
Well, as BGM said, "The amount of the debt and the settlement shares to be issued may fluctuate prior to the settlement of the debt, subject to the price of gold on the date of settlement."
However, presuming that the $3,854,649 mentioned in the 2015-03-23 release WAS the amount of principal debt owing at March 23, then the 8,335 ounces of gold owing at May 30. 2015, was valued at $15,145,351 ($19,000,000 minus $3,854,649), or $1,8171 per ounce.
While that may seem high (almost usurious, LOL), there is that clause in the 2013-10-09 closing news release which says that prepayments are to be calculated using a $1,600 (U.S.) per-ounce rate.
Therefore, it would seem that 4,167 ounces are at $1,200 (U.S). and 4,168 are at $1,6000 (U.S.). Using today's rate of $1.23, then 4,167 x $1,200 @ $1.23 is $6,150,492, and 4,168 x $1,600 @ $1.23 is $8,202,624...which totals $14,353,116.
That difference of $792,235 (2,640,783 30-cent shares) could be accrued interest, legal fees or even "rounding".
Based on the above, there should be enough of a cushion to cover "subject to the price of gold on the date of settlement", however, should gold go above $1,2000 and $1,600 on the date of settlement" BUT...well, what the hey?? What's a another five or 10 million shares in a friendly transaction which so benefits the current bagholders?
"If the then current gold price is less than $1,200 (U.S.) per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of $1,200 (U.S.) per ounce. If the then current gold price is above $1,600 (U.S.) per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of $1,600 (U.S.) per ounce....If the then current gold price is less than $1,200 (U.S.) per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of $1,200 (U.S.) per ounce. If the then current gold price is above $1,600 (U.S.) per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of $1,600 (U.S.) per ounce...Notwithstanding the foregoing, the company will guarantee a minimum rate of return to the lender of 10 per cent per year on the aggregate principal amount of the facility over the life of the facility...The facility is due and payable by way of three cash payments on each of July 31, 2014, May 31, 2015, and March 31, 2016, and the company may not voluntarily prepay the facility at any time prior to maturity without the lender's prior written consent.
However, the company may at any time prepay all or any part of the facility using a reference price of $1,600 (U.S.) per ounce of gold. The facility does not bear interest.