Resource Capital Gold Corp GDPEF

A few things cleared up:

[lmcbain]

So I had a chance to sift through a bunch of questions, thoughts, etc and then discuss with Jack. Here are his answers:

• First off the biggest white elephant that has been floating around is that there is $30m owing - that is not correct, as some of the money that has been shown as owing by the entities covered in the filing are subsidiaries owing money back to RCG and as such when it is actually all rolled up that money is not owed any outside source and is not part of this restructuring / refinancing proposal.
• I am told the actual money owing is around the $16m mark - about $8.5m owing to Sprott Lending, allowing for accrued interest, about $2m owed Gary, about $2.2m owed CRA and then a collection of smaller creditors. CRA is the only hard debt - can't really be negotiated.
• The CRA monies owed are from withheld taxes - things like income tax, GST, etc. It is monies that the company has collected and reported, but used the funds elsewhere in the interim.
• The plan being proposed includes the sale of property to generate a certain amount of funds, it also includes the use of some of those funds to generate production income (greater than the expenditure, from the Dufferin and those funds will go towards debt repayment, along with the sale proceeds.
• A proposal to work with Sprott Lending will also be tabled and may or may not be accepted to try to work the Dufferin and see if there is any way to keep it.
• The Dufferin still offers a sizeable resource to be mined and it has the mill and as a result is likely their most saleable asset - however, the company seem to feel there is more value to Tangier than the market has allowed for and that it's sale may be beneficial. If they can come out of this owning either, it will be a bonus. I personally believe that the additional exploration properties that were acquired is the most likely current resource asset that might be retained, along with the tax credits. 
• If we survive, one of the most likely scenarios is that RCG returns to being a shell (hopefully debt free) and between being an active shell and having the tax credits as a leverageable asset, they manage to acquire a new project and finance the company afresh on the back of that acquisition.
• I have also asked about the proposal and the vote it willrequire - based on what Jack has told me, there is a single proposal that will be run through the court, then assuming it is approved there, will be submitted to the creditors - 1 proposal submitted for all creditors (secured and unsecured) to vote on. The requirement for the vote is 51% of 2/3rds of the outstanding debt must be voted reflected in the affirmative for the proposal to proceed. Once that vote takes place and assuming it is approved (Sprott Lending and Gary voting in the affirmative would suffice) the company then has the responsibility and the power to proceed.
• The company will be the ones presenting, negotiating and deciding upon acceptable offers for the properties for instance. It will not be Sprott Lending controlling that - at least not on the surface.
• IF the company can sell the enough of the property to cover a negotiated debt settlement and still hold some asset, they may wind up being a takeover target again, as there MIGHT be a property asset and there will still be the Tax Credits.

I hope this helps. I believe it to be accurate - it is what I was told by the company when asking the appropriate questions.

Salut,
Leigh McBain

[LeftBook]

Leigh, please clarify ... you wrote : I am told the actual money owing is around the $16m mark - about $8.5m owing to Sprott Lending, allowing for accrued interest, about $2m owed Gary, about $2.2m owed CRA and then a collection of smaller creditors. CRA is the only hard debt - can't really be negotiated. --- Is the $16M of actual money owing including or excluding Sprott Lending

[lmcbain]

I thought I was pretty clear, but based on your various scenarios the one that represents what Jack told me would be: $16M claims including Sprott Lending $8.5M Sprott Lending $2M Gary Lewis $2.2M CRA $3.3M claims of smaller creditors Salut, Leigh McBain

[LeftBook]

Leigh, your post was excellent as always. Highly appreciated. I will use $16M. ---- Nattering on my own. I don't think I am on the same page.  I expect to be able to relate the claims to the balance sheet. I assume the total assets equals the "total liabilities+shareholder equity" and they are both, say, $32.9M per the Sept 2018 balance sheet. starting with $32.9M  

[kenmar]

 Great post! Every person with a penny owing will be listed. Taxman will want to see that payments are coming. What could they get for Tangier I wonder? I guess they could offer a toll milling agreement with it. Lol

[LeftBook]

every claim above $250 is listed. I did a quick count and found that there were about 130 claims It is not clear how many claims are for money lent to the subsidiaries, not due for months or years, but claimed  in the process. versus claims for goods and services

[lmcbain]

From what I have been told it doesn't matter much how many creditors there are - if you consider each dollar owed as a share for the purposes of the proposal vote, then think of the proposal vote as being 1 vote per share. Sprott Lending and Gary will control the outcome of the vote based on what I was told regarding how this works - at least according to Jack's response. Salut, Leigh

[damianchosenone]

Is that for sure? Unsecured and secured creditors vote separately.

[lmcbain]

I asked Jack the question point blank whether there was a 2 stage vote (unsecured and secured creditors voting separately and on separate proposals) and was told NO, that there is a single vote on a single proposal for a path forward and that the court would vet the proposal first and clear it for submission. If this is not the case, Jack does not have his facts straight, but this is what I was