RE: Westridge Management ...heavymundomoney,
Obviously oil and manganese are two different birds, but the principles of financing with debt based on the surety of future cash flows and asset reserves are similar.
The key lines in the EOR.V NR, as related to hedging of future production to provide stable cash flow for debt service, are:
1) "Also in connection with the Credit Facility, the Company has entered into Hedging Agreements with the Bank's Capital Markets Group and executed transactions for the forward sale of a portion of its share of projected production. As of December 20, 2010, the Company's two subsidiaries have hedged approximately 55,000 net barrels of crude oil for delivery in 2011 at an average price of approximately $90.64 per barrel, subject to customary adjustments for quality and transportation."
2) "The Company's President and CEO Mr. Barry Lasker states "The signing of this Credit Facility is a significant step forward in the development of the multiple projects we have identified in our oil fields in New Mexico. A reserves based credit facility is a necessary tool for additional financing for projects we are pursuing, including our infill drilling programs we expect to commence in 2011, as well as the Cortez Pipeline connection to deliver CO2 to our oil fields in 2012."
So long as a financier (Vicarage, Westridge, or other investment bankers, banks, et al) is comfortable with the future production numbers of CNY and with the ability to hedge sufficient future production, then I do not see why a credit facility would not be warranted for CNY (yes, that's a double negative). That said, I am not close enough to all of the CNY particulars to make a definitive decision. However, from this vantage point, CNY appears to be on the right trajectory towards production, cash flow, asset reserves & resources expansion, and appropriate financing (equity and/or debt facilities).