LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

90 M Guy is not Stupid

[peterstock1]

Unsecured with 6%, conversion for 1.4$, 90M..trading at 0.96C.

Is the Guy stupid to take on this Deal?

May be something is UP...

[coyote13]

Not the smartest deal by the co. Hedgies will short this for the next while. Also, street will view 1.40 as max value for the forseeable future. As a rule I don't like co's to issue converts. Mgmt team smarts could be viewed as sub par imho having done a convert deal. As for dilution, clearly there is some it just may not be as big as it appears at face value.  I will be jumping off

[clestor]

Good comments.  In my view, convertibles are last resort financings. But, there is robust demand for yield instruments these days so the convert has good demand . . . so, likely the 6.25% coupon is reasonable and maybe this impacts the NAV less than an equity raise. But, if gold price goes lower, LSG will have more liquidity problems.  I am thinking their $850 / oz cash costs benefits

[Risktaker7]

It is very unlikey unless there is big news coming that the notes will be converted into shares at $1.40 by September 30th. They just increased their loan from $50 to $90 million and paying slightly higher interest.This is the past deal they had with uni-credit with the 50 mill. The cost of the Facility, including structuring fees, is expected to average between 5.0% to 6.0% on drawn amounts over

[lowpickr]

"It is very unlikey unless there is big news coming that the notes will be converted into shares at $1.40 by September 30th."   2015

[goodluck2u]

I think there is a reason they wanted the extra 40M.  Does anyone have the answer to the 40 million dollar question? GL