Cerror Prieto Property Sale.I’m looking to find a copy of the “Subordination Agreement” between OCO and GGA relating the Sale of the Cerror Prieto Property. If anyone here has seen a copy on the internet could you please direct me to it?
It appears that the bulk of the funds generated by the sale of this property are being held back until GGA pays back 4.25 million dollars, plus related expenses ( interest, ect…), to those who held OCO’s debentures. What I can’t find are the repayment terms. It appears that OCO is owed around 5 million plus once those holders of our old debentures are paid off by GGA. What I’d like to see is the repayment schedule.
Promissory Note #1 should have about $1,500,000 going to OCC once the GGA settles this debt of 4.25 million. This amount is also tied to GGA achieving 1,000 ounces of gold production (Dec 2013, they announced that they had already achieved 280 ounces)
The royalty program which kicks in for any month where the average price of gold is more that $1,250 (current price of gold should see this royalty realized now). OCO receives 20% of the amounts greater than $1250 per ounce to at maximum of $1,340 per (or $90). Example gold averages at $1,300 oz for Feb. and GGA produces 500 ounces.
Amount of the royalty should be ($1,300 - $1,250) = $50; ($50 X .2)= $10; ($10* 500) = $5,000. At least that is how I interpret this royalty program; please feel free to correct any of my mistakes. This royalty is paid on all gold produced in this category within the first five years of production up until it reaches 90,000 ounces. No royalty is paid after the first 90,000 ounces have earned a royalty. Using the example above: ($10 X 90,000 ounces) = $900,000. and it looks like gold may go higher than $1,300 oz avg. per month.
This royalty is not paid out until after the 4.25 million is paid to the old debenture holders.
Promissory Note #2 $4,125,000 due on Aug 30, 2015? (I’m not sure if this is the 2nd anniversary date they are referring to), this amount also can not be paid until after the old debenture holders are paid in full. However, it seems that the company could receive 16,500,000 shares of GGA in lieu of cash. I’m not sure so you need to check with the company, but, this seems like a loophole as it appears these shares can be distributed to OCO before the full repayment of the old debenture holders.
From my impetrations it seems OCO is looking a good stream of revenue but only after the old debenture holders are paid off. If GGA production at Cerror Prieto Property increased dramatically I’d be surprised if a new deal did not materialize in which we’d see OCO receive monies quicker but at a discounted value compared to the current agreeme