RE: RE: RE: Financing - warrants Again, Bottles - why don't you loan CRJ the 20MM it wants? You seem to think this is a no-brainer risk wise.
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>>>Whereas CRJ has" one" mill, it has "two" mines in operation. If one were to shut down, the other can keep moving rock. Given that one will infact shut down as the shaft is tied in, CRJ has statedmultiple [sic] times that the other mine will stay up and running to process ore. When Santoy Gap comes on line, both of these mines will have high grade ore to feed the mill (ie: Santoy 8 at present is made of uplower [sic] grade ore at present). Banks like that btw.<<<
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REALLY??? Are you really that short sighted that you can't see the flaw in this argument? Jeez.
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How short-sighted of you! Two problems with your argument - one you ignore mill feed rate versus profitability AND you assume the "oh Sh *T" would not be the mill.
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Look, right now it takes ore from BOTH mines at the Seabee property to allow CRJ to have cash costs in the highest quartile of all miners. So what happens to cash costs and thus Operating Revenues and ultimately the ability to repay the loan if there are problems underground? Sure, problems at one mine don't stop production from the other mine necessarily, but the ore from one mine apparently isn't enough to hit production targets or cash flow needs. Now, that said, IF CRJ could fill the mill with the ore from just one mine, then why aren't they doing that and why aren't they expanding the mill to accommodate maximum production from BOTH mines?
Remember, issues underground aren't uncommon and even some of the best operators have underground problems - take a look at AEM's Goldex and GG's Red Lake operations. Those underground issues sure hit cash flow. Lack of cash flow means lack of loan repayment.
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But what is truly amazing to me is the fact that you missed the fact concept that CRJ could have operational issues at the mill. WHAT THEN? How will CRJ be able to generate cash if the mill gets shutdown or curtailed by some incident? Equipment breaks, operators scr *w up, stuff happens. So if the mill is shutdown or production is cut - then how does CRJ make money? How are they going to repay a loan under those circumstances?
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So the point is that a mine company with ONE cash producing operation presents a higher risk to the lender and as such - for taking a higher risk, CRJ has to pay more in the form of higher interest rates, sweeteners, options, equity, hedges, forward sales, whatever. Therefore, Bankers who are in the business to make money, not take risk, aren't as favorable to companies with ONE cash flow source.
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If you can't "see" these risks and appreciate them, then you are doing nothing more than gambling with your investment dollars. Good luck!