High River Gold Mines Ltd HRIVF

RE: Detour soaring today

[production05]

I am not an expert as to how this works but I will give it a guess.

My guess is that it will depend of whether we receive cash or shares (or a combo of both) from the take out of Detour Gold.  If it's shares then I assume that the shares of the acquirer will just replace the Detour shares as collateral, similar to how the Detour shares replaced the original PDX  shares.  If it's for cash then it may become interesting.  It wouldn't make sense for them to hold on to our cash for collateral purposes (if there is sufficient cash to pay down both debts collateralized by the Detour shares - Royal Gold and Severstal) unless the contract calls for them to initiate some sort of escrow set up, where the cash just sits there for the duration of the payment period.

With sufficient cash available at the takeover closing, I would hope that HRG would then be allowed to eliminate both the Royal Gold debt and the Severstal debt, given availability of sufficient cash from the transaction.  I suppose it all depends on what's in the contract.

Again, I really have no firm idea as to what happens in such as situation.