Resource Capital Gold Corp GDPEF

per share value of tax-loss credits

[LeftBook]

Does anyone have a number for tax-loss credits that could be used along side the shareholder equity?

 

I know it depends on context. A larger company might just buy the whole thing  with tax-loss credits in mind. Shenanigans are possible or whatever.  It ain't worth nothin if the gold is the ground. Moving on ...

 

 

I am after a conversational number as if the company was going forward.

I am using $6M.

 

I started with $20M guesstimate and assumed the tax credits were applied $2M per year over 10 years. I computed a breakeven NPV using a 5% discount of the PEA.  The financial calculator spat out $7.72M.

 

I cut that down to $6M which is about 1/2 of 12.1M (pre-tax NPV of $121M over 10 years from the PEA). Yeah. a sharper knife might be more appropriate.

 

 

($13M + $6M)/175 = 10.8c/sh

or ... 

shhh, dude, it is already baked into the book value 

($13M+$0)/$175 = 7.4c/sh 

 

[LeftBook]

going back to June 2016 when the company was just a shell $6M/45M = $13c/sh

[damianchosenone]

Like I said ; sprott and Gibson have enough money and power to tell sprott lending to not takeover and work out a deal. It all depends how much value they see and if he believes he can make his money back on the 30 million shares he owns. The only question I have is how did he manage to sell 8 million shares end of December and who bought them?

[therager]

absolutely disagree that Sprott and Gibson have the "power" over Sprott Lending to dictate what they do in this matter.  Gibson does not even work for Sprott Lending.  I would also surmise that becasue he is an equity holder personally, ES has a huge conflict of interest in regards to Sprott Lending.  Sprott Lending must act in its own best self-interest.  These

[damianchosenone]

And why would sprott lending want to take over the properties? They would make more money exercising warrants and getting more warrants. If you look at their track record, they actually provided more money to some companies that were in default or close to in the past.

[lmcbain]

The properties are a hard asset, where the value has no reliance on the management of the company. So while they "might" have more upside based on the investment in the company, there is a risk involved that doesn't exist with the simple ownership of the properties. Additionally, the resultant sale may create a scenario with the new buyer that offers just as much (or more) upside, as

[therager]

Yes, Leigh...now you are talking.  Damian does not want to acknowledge that there is another alternative to Sprott Lending that may be more lucrative and secure for them.  Such as, a purchaser with a much better and cleaner balance sheet!!  Agree, not sure it will happen, but given all the corporate actions over the last month I can envison a scenario where it is the most likely and

[therager]

Sprott Lending wants to get paid back.  Plain and simple.  RCG needs to raise $2.1M as soon as possible to pay off the tax authorities.  They were paying all these large salaries and forgot to pay the payroll and other associated taxes.  Sprott Lending will assess the credit wothiness of any deal that is put in front of them.  Seems to me, if there was a credible one, they

[damianchosenone]

Well rcg will still remain a company with its tax credits and the can look for new properties and financing.

[lmcbain]

Damian - again, you and I have had this discussion. The company will remain alive as a shell in need of a project, but with tax credits that can be leveraged, "IF" and only "IF" they can cover their debt load within the confines of a negoiated deal by running some onsite short term production and also selling off assets. Their ability to sell and cover that debt load, is not

[damianchosenone]

Do you know for sure they want to be paid back now and wont cooperate and work out some deal? Debt for shares or warrants or something?

[therager]

Damian, you appear to have so much vested in this stock that you don't want to or won't listen.  No one knows for certain what Sprott lending will do.  However, if I was them and was working on a resturcturing package with the current RCG executives, I surely wouldn't take the actions that have been taken.  If I was ES and was going to support the company with an

[damianchosenone]

You are right! I just read the pwc insolvency papers that they filed yesterday. Sale is started! Rcg received an additional 2 million from sprott lending just to maintain mine and not let it flood.

[therager]

So now the debt load has increased by another $2M.  $2.1M to tax authorities, $10.5M to Sprott Lending and an additonal $5.5M to unsecured creditors.  How will any thing be left for equity holders?  Very unlikely!

[LeftBook]

Leigh,   Based on your conversation with Cartmel, and  based on the pwc Status of File As At February 15, 2019  namely $2.2 million to fund operations ...   ... can you confirm that the numbers now look like this.   before $16M claims including Sprott Lending • $8.5M Sprott Lending • $2.2M CRA • $2M Gary Lewis • $3.3M claims of smaller creditors

[lmcbain]

The one thing is that Sprott lending doesn't want to put a full squeeze on as long as the company still controls the sale of the properties, as that would diminish market value. They are better off acquiring the properties in lieu of the debt and selling themselves, as they would be able to afford to sell them while going thru a proper negotiating period, as opposed to "needing" to

[therager]

Agree and this has always been to me the most logical outcome.  In order to accomplish this Sprott Lending will have to pay the $2.1M tax liability then proceed with a deed in lieu of foreclosure action.

[lmcbain]

Damian - you and I have had that discussion offline (re: Sprott sale of shares in December. Unless you happen to either have access to Eric himself or the buyers AND know whichever party you do know well enough to get a straight unfiltered answer from them, you will never know the answer to that questoin. Having said that, there are multiple reasons it may have been done, including that it was

[LeftBook]

An alternative, hopefully less cryptic way to understand the value of tax-loss credits.   From the PEA (see below) ... invest $9M pay $30M of tax    scale by 2/3 invest $6M pay $20M of tax     $20M of tax credits have $6M of value   --- raw numbers can be found  PEA pg 207, 209 Capital, working capital, pre-production expense $9.8M Pre