RE:RE:RE:RE:CorruptGivemeabreak1,
You say: So when you post a bond the bond money is tied up so any monies needed immediately is fronted by someone against the bond!
I say: True. According to the YTG Briefing video it was mentioned by the Justice Minister that she believes there are two entities that fronted money for the bond. And so the bond money is there. And I believe that JM once told me that that the collatoral for that bond was the Inventory on the Leach Pad. No cash in their account or any other VG assets.
You say: So typically what you have in any CCAA or Bankruptsy procedure is what is called DIP financing ie debtor in possession financing.
I say: Typically yes, except that this isn't a CCAA or Bankruptcy procedure (yet). It is a court appointed Receivership. Listen to the YTG briefing video, VG asked for an adjournment because the decided they wanted to apply for CCAA but Justice Conway decided that a Receivership route was the best way to proceed and ordered such. Now why would she do that? My guess is because she wanted to ensure that YTG and the Reciver had complete control over this issue to clean it up as obviously she believed that VG was either not willing or capable of doing it and she also likely wanted to ensure that VG assets are used to pay for it (to the extent possible).
You say: Any financing done after a receiver is appointed under DIP becomes number 1 ie before any payment to secured creditors etc so drawn against assets including the bond. Needless to say in this case the front financing is pretty much 100% secured......
I say: OK, so if YTG's interim fronting of the $50 million to PWC puts YTG in a position of receiving 1st payment before any other secured creditors, then where do you think PWC is going to get those funds to repay that loan to YTG? Obviously from any cash and assets or VG first.
I suggested that you listen to the YTG briefing video which it seems you haven't done. The justice Minister clearly states that funds from the bond have NOT yet been accessed and that this aspect needs to be looked into further by them to see if the bond funds can even be accessed since the bond funds relate to a 'Reclamation Bond' which is generally used during mine EoL clean up and site reclamation. Because this is not necessarily a mine EoL situation but rather an environmental clean up situation and the YTG Justice Minister has now publicly stated that it has no intention to permanently shut down the Eagle Mine and infact their goal is to return it to an operational mine as soon as possible, that the reclamation bond may not even be used now and left for future use when the mine is eventually EoL.
So in a nutshell and as of this time, VG's cash and assets will be used and depleted to repay YTG's upfront loan. And the Minister also stated that if further funds are needed they will be provided and registered as a debt owed by the company. If the mine for some reason never returns to production as intended by YTG, then YTG will attempt to recover their loaned funding from the liguidation of the company's assets (and that's if and when the Yukon Taxpayers will be on the hook). A brilliant political move here by the YTG Liberal Government to satisfy FNs demands for action and address Yukon taxpayers concerns about them ending up paying for yet another mine failure!
You say: You guys keep spouting nonsense there will be no cost to tax payers until all monies available from Victoria gold and the bond are expended! This is not rocket science!
I say: There's always going to be some costs to the taxpayers because of the work their agencies are required to do to assess and manage these types of events. But you can bet YTG is going to do everything in their power to recover whatever they can.
The interesting thing with this Court appointed Receivership path is that if YTG now becomes the secured creditor infront of all the other secured creditors (as you say), what is it 3 or 4 banks, Osisko Financing, etc... can't be too happy with this move by YTG because where does that leave them in all this? Or were they consulted by YTG in advance and agreed in hopes YTG can get VG mining operations back up and running?
So is YTG really being honest when they say they have no intention of putting VG out of business and the goal is to return the mine to operational status? Well, just maybe the YTG got thinking about what the Yukon Official Opposition Party was saying and that maybe their goal should be to get this all sorted out and the mine back in operation so the company can continue to pay the damages and keep 500+ Yukoners employed and millions flowing in the Yukon economy?
My guess is that YTG is waiting to see what Parsons plans and cost estimates are to fix this mess and then go from there to see if this is going to be an environmental clean up endeavor OR a complete shutdown and reclamation of Eagle. I figure it'll take about a month or two and everyone will have a much better perspective of what the end result will look like and costs. In the meantime, YTG is saying we need to immediately deal with the environmental aspect, so PWC until you get all of VGs assets identified and figured out, here's $50 million...get at er.
Deputy Minister Lauren Haney even mentioned that Parsons is "World Renowned" has extensive experience with these situations. Also, experience with being able to isolate groundwater and capture it for remediation and that's a big deal because if they can get the contamination completely isolated to the mine site and treat it there, and perhaps keeping the environmental aspect of this under control for say even $100 million, then I beleive there's a good chance that the company will find the financing, either through a YTG loan or other sources to get the mine back operational.
There are so many unknowns yet and only time will tell, but in light of these more recent YTG public statements, JM needs to rethink his positon that VG is "Done", meet with YTG and see just how serious they are about not wanting to put VG out of business and get the mine operational again. If YTG can pull this off, they are going to look like rock stars and finally regain some trust from Yukoners that just maybe there is still a future for mining in the Yukon.
My opinion only. DYODD.
HB77