Fabled Silver Gold Corp T.FCO

RE: RE: RE: RE: RE: Hypothesis

[JohnEStromJr]

numskull,

What you say is true but look at it from a different perspective. 

We 'borrowed' $8 million from Coalcorp and have to repay it in cash or in shares at a $1.50 per share price.  That said, we still need $140,000,000 or thereabout to build the mine, mill and upgrade the Hydromet facility.  If the board elected to pay off the loan early the penalty would be 10% or $800,000 which amounts to barely over 0.56% of the amount we're borrowing but saving us, potentially, $ Millions.   We would also save - with early payoff - whatever is left of that 12% loan or the equivalent of a ten month of interest penalty.   As soon as the company has funding then the share price Should begin climbing.  Coalcorp is gambling the share price will be higher than $1.50 but if it isn't they lose on the conversion - but we STILL owe them $8 million plus interest.

But with financing to build the mine we will have a timeline of less than 18 months to be in production and making money.  If FCO isn't able to put together  a financing package then we have a problem.  That money is still owed Coalcorp and even though the loan/debenture isn't collateralized we do still owe and they could sue and get a judgment for that money, effectively giving them control over ALL of FCO's assets.  At that point  we're toast. 

If we can arrange funding FCO should immediately notify Coalcorp that they intend to pay off the Coalcorp loan/debenture entirely and reduce dilution. 


"Formation may, at its option, on not more than 60 days' and not less than 30
days' prior notice (the "Notice Period"), redeem the Debenture in whole or in
part......" 

Section 8, paragraph 2  REPORT UNDER NATIONAL INSTRUMENT 62-103