Here are a few thoughts about the deal:
1) concerning the forward gold sale of 45 mil USD for around 51,879 oz, I thing this is not so bad as many believe. If they have lent the 45 mil USD they would have to pay interest of 4,5 million USD per year with an interest rate of 10%. (13,5 million for three years). The total amount would be 58,5 USD for the three years (principal + interest). If we divide this amount by the ounces to deliver during these 3 years we receive an average price of 1127 USD/oz.
2) the debt will be reduced by 75 mil. USD with the conversion of the preference shares and no dividend will be paid. So there will be an improvement of the cash flow by 3 million per quarter. But on the other hand the forward gold sale will reduce the cash flow. They have to deliver 4,300 oz per quarter. Assuming a gold price of 1200oz this will have a negative impact of 5,2 million on their cash flow. The amount of the forward gold sale (debt) will decrease by 3,75 million so that the impact would be around 1,45 million USD.
3)Without the dividend payments the financing costs will be reduced about ten million.
4)With the 45 million of the forward gold sale they can pay their bank loans which are due in May and July 2017 and reduce their bank overdraft.
This will also reduce financing costs.