I misread the settlement. RCG sold substantially all of its assets to Sprott Lending, the highest bidder, for $2.2M. It is not a debt settlement. RCG still owes Sprott Lending $8M.
Sprott Lending purchased the properties for $2.2M. It is expected to take a $8M loss on the credit facility.
RCG owes more than $18M and is effectively bankrupt.
Eric Sprott, himself, remains the largest shareholder of RCG. He will likely take a $4M loss on his investment in RCG.
The properties were purchased by RCG for $10M + $1.5M. A $7M credit facility was secured against the properties. The properties were ultimately purchased by Sprott Lending for $2.2M.
RCG does not have the cash to pay for the “improvements” to the properties. The unsecured creditors will go unpaid for their goods and services.
Jack’s accounting numbers for the properties were not supported by market tested prices.
PwC’s accounting numbers for the properties were not supported by market tested prices.
The value of the in-situ gold $2.2M/700,000oz = $3/oz
Other mines in the region are/were priced higher.
When money meets experience.
Money gets experience.
Experience gets money.