RE:RE:RE:RE:New Press Release - Victoria Gold Provides Update on Eagle Gold Mine IncidentWhat was announce by VG was that the company received Notices of Default.
The Company advises that it has received Notices of Default from its lenders under the Credit Agreement dated December 18, 2020 (the "Credit Agreement"). It's important to understand that these Notices are serious but don't necessarily mean bankruptcy is imminent. There's a link at the end that explains this process in more detail but my guess is this is where thngs are at right now because VG made payments last quarter and the next ~ $11 million is due at the end of September so not sure how they can be in default as of today. It's also worth noting that this event occurred at nearly the end of Q2 and so there had to have been gold produced in Q2 and proceeds from those sales. How much gold and how much net profit is anyone's guess but there has to be something. VG will likely go into a cash reserve mode and just pay the bills they absolutely have to in order to avoid / delay default. Can they acquire more debt or issue shares to raise capital? Well, that will depend on how things develop from here.
The US based hedge funds and other institutions are on vacation today so the shares had a nice pop today so far but you can bet they will be back at it tomorrow taking out the stops, using algos, you know their usual shenanigans. Unfortunately this means more of EricSnott and Singola58 and their usual non-factual blah, blah, blah.......
Special Considerations
If a borrower has several delinquent payments, they are at risk of default on a mortgage loan. This also poses the risk of lost collateral. When this happens, the lender may file a notice of default. While this notice may lead to foreclosure, that isn't always the case, The lender may simply be taking this step as protocol, and be willing to work with the borrower to bring the account up to date. Filing the notice may also include a negotiation grace period before further action is taken.
While some lenders use notices of default as the final step before foreclosure, others use it as a way to work with borrowers to bring the mortgage up to date.
A notice of default and subsequent foreclosure actions are documented and reported to credit bureaus. Thus, all foreclosure proceedings and actions can have serious repercussions on a borrower’s credit score. This will also reduce the borrower’s ability to obtain a mortgage or any type of debt in the future.4
Some lenders may choose to serve the delinquent borrower with a notice of intention rather than a notice of default levy or they may provide warnings to the borrower which gives them time to negotiate.
Notice of Default: Meaning, Overview, Special Considerations (investopedia.com) My guess is this is a pecking order kind of of thing and first to file helps to ensure the lender protects their interest. I suspect this is a slow process that will need Court approval so somethng to keep an eye on for sure.
My opinion only, please DYODD.
HB77