The Sprott "Loan Facility" - we don't pay by Novem The Credit Facility is for a principal amount of up to $7.5 million. Amounts drawn under the Credit Facility will be secured against substantially all of the assets of the Company and its subsidiaries. Funds borrowed under the Credit Facility will be used exclusively for the development of the Nixon Fork Mine and working capital purposes of the Company and its subsidiary, Mystery Creek Resources, Inc.
Funds drawn under the Credit Facility are repayable by November 15,
2012 and accrue interest at a fixed rate of 12% per annum.
In connection with the Credit Facility, a structuring fee of $50,000 has been paid to Sprott in cash. Pursuant to the terms of the Credit Facility, the Company will pay a non--refundable share bonus payment in the amount of $750,000 (the “Bonus Fee”) being 10% of the Credit Facility, payable in Common Shares of the Company determined on the basis of a price per Common Share equal to a 10% discount to the 10--day volume weighted average closing price of such Common Shares as they trade on the TSX Venture Exchange immediately prior to closing, anticipated on November
15, 2011.
From sedar.com
The Company received the first drawdown of $1 million on November 15, 2011 and the second and final
drawdown of $6.5 million on December 9, 2011. The funds drawn under the Credit Facility are secured
against all of the assets of the Company and its subsidiaries. Funds drawn under the Credit Facility are
repayable on or before November 15, 2012 and accrue interest at a fixed rate of 12% per annum. In
connection with the Credit Facility, a structuring fee of $75,000 has been paid to Sprott in cash. Pursuant to
the terms of the Credit Facility, a non-refundable share bonus payment in the amount of $750,000 (the
"Bonus Fee") being 10% of the Credit Facility, has been paid to Sprott in common shares of the Company.
3,260,870 common shares were issued from treasury to Sprott on December 9, 2011, and carry a legend
restricting them from trading until April 10, 2012.
Folks, ALL of that $7.5 million [actually $6.675 million after deducting the front end load] has been drawn out and most, if not all, has been spent. It is a ONE YEAR loan and the collateral is the ENTIRE company. Every paper clip, rock hammer, drill, truck - the whole company. What makes this dicey is that Richard Goodwin is no longer going to release production figures. This is a junior miner, a start up, and we are [my opinion] nearly broke. But since Goodwin is only going to release info quarterly who knows. Again, not ONE ounce of Fire River Gold’s ore is measured. Only indicated or inferred.