GREY:GYPHQ - Post by User
Post by
red911on May 29, 2012 9:16am
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Post# 19955302
Gold and silver purchase agreement....
Gold and silver purchase agreement.... Some here have expressed concern re: GGNs gold and silver purchase agreement with Waterton. Their agreement with SGN seems fair... no reason to think our agreement is any 'less fair'. Maybe GGNs terms are better? Either way nothing unusual here. I will say that the fact an emerging producer like GGN or even SGN would commit to selling ALL of their gold and silver to one entity for the duration of mining operations at any sort of discount suggests their has to be something more going on here. Senior secured loan payable based on significant gold discount for a certain portion of production until paid is one thing (and expected)... but to also commit to sell ALL other production at any sort of discount... i.e. '99.5% of the lesser of the 30 day trailing average price or the prior day settlement price less
.50 per ounce of gold and
.01 per once of silver'... why? Why did they feel they had to do this?
From SGNs latest financials:
"17. Commitments
a) The Company has committed to sell its gold and silver from the Mineral Ridge mine to its lender at a price equal to 99.5% of the lesser of the 30 day trailing average price or the prior day settlement price less
.50 per ounce of gold and
.01 per once of silver. After five years and for the remaining life of mine, the 0.50% discount will no longer apply."