RE:just my humble opinion I read that a little differently. I'm a glass half full guy:
The bridge loan is intended to provide interim financing to MMB while the company works to secure additional external financing of up to $200-million (U.S.).
So, they are chasing UP TO 200M$. What if they need less? I know spending less than expected has not been a strong point of BAJ, but who knows, maybe here.
Also, just reading over some old news releases to see what I could read between the lines. See below from April 2. Looks like they may have known this was a possibility as they made arrangements earlier to ensure additional funding was available, namely, changing their shareholder loans into equity. So, if they planned for this, this is no shock to them, then it seems they have it under control. Also, notice in the news release they have chnaged their shareholder loans into 94M$ in equity in MMB. I wonder how this will manifest itsefl in the next financial report? The market cap is like 15M$, yet they have 94M$ in equity? At least on paper that looks pretty good.
Vancouver, April 02, 2014 -
Baja Mining Corp. (the “Company” or "Baja") (TSX-V: BAJ - OTCQB: BAJFF)announces that it is joining Korea Resources Corporation (“KORES”) and the other members of the Korean Consortium in converting all of the outstanding shareholder loans of Minera y Metalúrgica del Boleo S.A. P.I. de CV. (“MMB”) into equity of MMB (the “Conversion”). The Conversion is intended to assist MMB in obtaining further financing for the Boleo Project and in its efforts to restructure its existing project financing. Baja and KORES have also agreed in principle on certain terms to be included in a new MMB shareholders agreement (the “New Shareholders Agreement”) proposed to replace the current MMB shareholders agreement (the “2010 Shareholders Agreement”).
The Conversion
Pursuant to the Conversion:
•
Baja has agreed to convert its US$94 million of shareholder loans into MMB equity and the restructure of the accrued and unpaid interest on such loans amounting to US$28 million into a separate promissory note with an interest rate of 4% per annum;
Additionally everyone is quick to point out the negative- other projects where over runs were too much and so they walked away from the project. You know, the reverse happens too, and a lot more frequently I might add. Take Barrick Pascua Lama for example- in 2009 when construction was sanctioned the estimated cost was 3B$. As at last year the new estimate was 8B$. They kept building it. It was an increase in the price of skilled labor and materials that pushed that cost up (and the same is probably true for BAJ- a 5 year old estimate is never accurate, not even close). True their in limbo right now for environmental violations, but it wasn't cost overruns that shut them down. Who is going to walk away from Billions of invested dollars?
Anyways. BAJ shareholders are a stubborn bunch, and they've shown they're not willing to part with their shares for less than 5cents. I know quite a few sold today at less than that, but overall the last several months 5 cents has been our bottom. Not many people out there cost averaging at less than that. So, who's gonna sell this at a loss? Not many. So hopefully we all decide we're not willing to take a loss on this investment and we hold on to our shares until construction is complete and production starts. Because it will get there- KORES is not walking away from billions of invested dollars. It's a short wait to triple (or quadruple at these levels) your money- lostalot has shown us that even at 7%, we are worth 19 cents a share. And only if we use up all of the "UP TO 200 million" will we go down to 8%.
Again, all just my opinion, but this is the way I understand the NRs.
All the best.