OTCPK:FRSAF - Post by User
Post by
JohnEStromJron Nov 08, 2011 7:08pm
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Post# 19220408
Sprott Credit Facility
Sprott Credit FacilityI continue to be skeptical of that credit facility. It's for $7.5 million, pays interest at 12%. In addition, the company paid $50,000 cash and gave a Sprott the right to buy $750,000 in a 10% discounted price per share? Initially we're going to only borrow $1 million with the remaining $6.5 million sometime in the future and the company guaranteed this with all of it's assets? The loan [money actually borrowed] would be due in one year - November, 2012? Heck of a deal... But here is what most bothers me....
"Now that cash flow has started, both from concentrate and doré sales, we do not anticipate that we will need these funds."
That comment is factually incorrect. We have NOT sold any dore. We shipped two dore bars of approx. 30 kilos each to Johnson Matthey but the bars had impurities and Fire River and Johnson Matthey need to resolve that issue so that the dore can be refined. Imagine, gold has been mined for thousands of years but Fire River can't produce dore without impurities and the refiner can't refine what it received. That's a head scratcher.