Here is the details we got from the NR regarding the Credit Facility:
- Upon closing, Signal Gold shall immediately draw US$16.0 million (approximately C$21.3 million) from the non-dilutive Nebari Credit Facility, which will be used to progress critical pre-development activities for the Goldboro Project and the repayment of the existing US$8.0 million senior secured facility with Auramet Internal LLC.
- Key activities include detailed engineering to support industrial approval permits, an updated Feasibility Study to include an updated mineral resource estimate and capital and operating costs, and advanced geotechnical work to de-risk the construction phase of the Project.
- The credit facility has a maturity date of two years from the initial draw with the option to extend up to another 12 months and is expected to be repaid from the proceeds of a project finance facility for Goldboro which the Company is targeting to occur later in 2023.
- At Signal Gold's election and subject to satisfaction of certain conditions precedent, the Company can draw a further tranche of US$5.0 million.
- The financing will be secured by a pledge of shares in favour of Nebari on the Company's material Subsidiaries, namely Goldboro Gold Mines Inc. and Point Rousse Mining Inc., together with security on substantially all of the Company's material real and personal property.
So, the maturity is in 24 months but they can extend it to 36 months. The money will be used to pay the $8M to Auramet and advance Goldboro development. When (if) they will get the finance package ready for the development of Goldboro, they will pay pack the debt. This is the scenario if everything goes well. They have backed the loan with the company's assets.
Now, the way I read this, if they are not able to pay the debt at the maturity date, then they can pay what they can (or not) + the rest in shares. I do not think Nebari has anything to say about the disposal of the company's assets (but I have written an email to Rob Dufour to verify that point). If they do have a say, well I will agree with you that current management has taken a serious risk.
Shiftyone:
We are still pretty much broke even after the financing the other day. We have no money to keep drilling.
The financing was extremely expensive and we had to put up the whole company as collateral.
Well, we are an exploration company and you were asking for non-dilutive financing. They arranged one and you are not happy. Would you have prefered they raised money at the actual SP? Meaning about 50M shares to get $20M while we are in these unliquid markets and restless dumping by some manipulators to keep the share price down? Sure you have to give some incitives beside paying interests in the context we are right now. Giving 15.4M warrants (not shares) at a strike price of 44 cents (adding $6.8M to the treasury if they are fully exercised) is not that bad in my opinion.
If the sale of pointe rousse happens quickly, and I mean in the next 6 months. We have an obligation to Nebari to give them the money because they do have that as collateral towards the loan.
Perhaps the company can get that changed, but that is how it stands today.
If we were to sell point rousse just for example in the next few months. We have an obligation to pay back the financing with the proceeds unless they can change the terms.
Did you read the contract? You're certain that we have an obligation to pay Nebari? If so, could you state your source. When I read the conditions stated by the NR, all I can see Nebari wants is being paid with interests at the maturity date and yes, their 15.4M warrants.
If that were to happen and we paid back the loan... then we gave away at least 15 million warrants for nothing (possibly more). The shareprice will go up (that is why I bought).
We will have to give them the proceeds of the sale. They can redeem them warrants and perhaps, or easily make 15 million on a loan of 16 million in months.
I guess you are an expert in finances now and that you would have been able to negociate a top contract having Nebari loan us the money for free. It's easy to criticize when you do not know the context (once again, you are pitching assumptions without the context). It's your assumption that we give 15.4M warrants for nothing. Nebari will need to pay $6.8M for their shares. The SP will need to get to 1.44$ to have them make a 100% profit. If it happens, I will be happy for them the same as I will be happy for you and for a lot of people here. I do not know why you are harsh about Nebari doing money: they are in the business to make money.
The shareprice will not stay that high the way it is being run. So we gave them the whole company as collateral for a loan that they will likely make 100% on in a few months.
We did not give them the whole company. If you think so, please give us your source.
We have no money to even keep drilling.
Yep, you are right. Let's see if the next couple of NRs expected in the coming weeks, including drill results, will boost the SP to the level it should be and then raise money through FT shares financing.
We are paying management exorbitant salaries for what they are doing.
That's your opinion. Again, please provide us another management team with the same competency level that will work for us for free. We will be glad for it.
But the company is going nowhere quickly. We just diluted it for a loan that we should not have needed to get. Certainly not under those conditions.
We did not dilute it, not yet. It will be diluted IF Nebari exercises their warrants. And it's the reality of junior companies to go to the equity markets for financing drilling campaigns. If you do not like it, well I propose you invest in blue chips companies.