Western Magnesium Corp V.WMG.H

RE:$210mil Gem Finance

[Sherry35]

StockJokie - Very interesting find on your part. I have some comments with respect to this  tidbit.

1) I suspect there is a penalty clause of $4.2M (US?) for not drawing down on the three year capital commitment agreement. I don't think shares (from a convertible debenture) or interest (from a loan) come into play because "the Company ... not drawndown any funds under the credit facility".

The penality may reperesent the operating cost of putting the credit facility together. I say costs, putiing the credit facility together of this magnitude could of involved a large pool of investors.  This $4.2M (US?) penality would be clealry stated in the credit facility contract.

2) With out knowing the timeline for credit facility signatory  as well as Sam taking the CEO helm, I suspect the previous CEO may have made this deal. You need to see the signatures on the CF contract or pomisary notes to rightly point the finger.

3) "The Company believes that the claim has no merit and will vigorously defend against it" implies lawyers are NOW involved. So, how much of the $7M PP is going to service this issue? Lawyers aren't cheap.

4) Unless GEM can freeze WMG's accounts, you can't get blood out of stone as they say. I suspect this will be quietly settled out of court so you have to read about in the quarterly financials. With the regulatories (OSC or BSC) being advised of this issue ("not received regulatory approval"), they will be looking for closure in the company filings at a minimum.

How's that for my two cents worth.