RE:Merger DD : NEXG and SGNL Financial Situation Hi DDD,
You conclude your comparison of NEXG's and SGNL's financial situation withe the following :
"For SGNL, aside from needing to pay the $20M debt in February, I do not see any rush in signing a merge deal if some agreement is done with Nebari or any other Royalty or Streaming companies to pay the debt."
First of all, it's not 20M$ that SGNL has to repay because there is accrued interest tonrepay on that debt. At June 30th, the total short term debt was at 27,7M$, and by February 2025 it could be close to 30M$.
Second, you say it would be "easy" to get 25M$ by selling a 2,2% royalty on Goldboro. It would NOT be easy. The resource markets have deteriorated since 2022, and nobody is going to invest in a royalty if there is almost no clear hope of producing gold in a realistic horizon. That was surely being considered in the BMO process, but it seems nobody was beating down the door to invest in that way.
Then, we are left with a 30M$ due IN JUST A COUPLE OF MONTHS. Raising that sum at the same conditions as the proposed financing in the NEXG deal would be like giving away more than 60% of the company. And if we can't get enough from those financings, it is a real possibility that we would very quickly have to file for bankruptcy and lose everything.
The proposed merger is not perfect, but it's the best and safest way of keeping a good chunk of Goldboro and having a credible path to achieve production. Say no to that deal and the vultures will soon be circling over us.