RE: great article on the deal with Anglothe article states:
More importantly, Village now has the option to settle a DeutscheBank gold forward agreement. Simmers previously took a $25m loan fromDeutsche in exchange for the delivery of 3,600 ounces per month for 18months – effectively a hedge at $385 per ounce if you exclude interestcharges. Which is absurd when gold is trading above $1,500/oz.
So, Village gets $30M, which gives it enough money to settle a $25M loan payable by 64,800oz of Gold? I think I see now why RBC was selling shares down at 0.38. Deutche Bank stood to gain $75M from the gold payback, and now Village has that gain instead. What a play.
Another way of looking at this play -- Village got the equivalent of $105M for 20% of FIU: $.60 per share from AngloGold (cash), and $1.60 from Deutsche Bank (gain from escaping gold hedge).
BTW: Did the anonymo0s post which was a few minutes after PI's duplicate posts just disappear? How do you do that? The content was the same as PI's posts. Weird.
Now that that's all over, I see very little selling pressure on this stock, and more investor interest now that AngloGold is unlikely to want it's 20% stake in FIU diluted by FIU issuing shares to cover the notes due in 2012. I am sure any gold company would want FIU at $1 per share, but I highly doubt any FIU shareholder except the daytraders would want to sell for that.
I see this stock back above $2 within 90 days.