Gryphon Gold Corp GYPHQ

RE: RE: Alternatives...

[metcoalfan]

I suppose there is a 2nd alternative to raising the cash that is probably going to be needed over the next 6 months (again, the real lynchpin to my whole thesis is that they still have about 4 mm cash in the bank at the end of Dec - essentially that they conserved it and let the payables go way up with all of the boiler problems).   The deal valued Borealis at 28 mm.  Then the deal called for a 4 mm capital call going forward, which then puts a value of 32 mm on Borealis.  GGN could in essence raise 4.5 mm by giving up 15% of the total JV, taking them down to a 25% interest in 7 months.  At that point in 7 months, there would be something like 6 mm in debt left, 25% of Borealis, no dilution to the share structure of GGN.   Or GGN can do some combination of share dilution vs JV dilution.  It's an ugly outcome for all of us - on an absolute basis, I'm very disappointed; on a relative basis - relative to the reality of poor performance at the mine site for the last 18 months - GGN equity is still in the game on a long term basis I believe.....we still need to see some year end data because if they don't have something close to 4 mm in the bank, all bets are off.  At the end of the day, I still don't think it's in Waterton's enlightened self-interest to let GGN completely fail.