Intl Northair Mines Ltd INNHF

Pinetree reports on its debt covenant situation

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I have never understood why pure exploration companies or companies without any current/near-tern cash flows ever go into significant debt. Best I can tell, these types of companies frequently blow up, especially during economic downturns. What typically happens is essentially what is happening with Pinetree. The asset value drops substantially due to equity holdings of its portfolio investments. This triggers a failure in debt covenants (debt-to-asset ratio), thus making the debts due immediately, if the company is unable to put the ratio back in line. The company has to scramble to raise cash and the whole thing blows up. Anyway, it looks like Pinetree made a couple of investments in other companies over the past couple of days of November. Perhaps it means they are alright for now and do not immediately have to sell more Northair holdings. Here is the Pinetree update NR: https://www.marketwired.com/press-release/pinetree-capital-announces-status-of-convertible-debenture-debt-covenant-tsx-pnp-1966472.htm