Page 7 has to do with the red kite loan that failed and I give credit to MJ for explaining it in prior posts. However, my question is considering Inmet is no longer around, why cant we fall back on it to obtain the funds once again considering there are no more barriers in place.?
Inmet’s attempted takeover bid of September 5, 2012, impacted the Company’s ability to execute a high-yield debt transaction. The Company had been in the final stages of closing a potential $210 million senior secured notes offering which would have strengthened the balance sheet to secure the long-term development of the Company, including the acquisition of additional mining equipment required to increase the feed rate of the new 4-ball mill plant setup and to prepay Deutsche Bank as a condition for the then planned spin-out of PDI. At a hearing with the British Columbia Securities Commission (“BCSC”), held on October 13th at the request of Inmet, the Company was formally instructed by the BCSC not to pursue its debt raising effort until a final outcome of Inmet’s takeover bid was declared. In the opinion of the BCSC the Company’s shareholders were entitled to decide on Inmet’s offer as it was presented before them and the Company was, therefore, deemed bound to respect such terms. As a result the Company was forced to delay the acquisition of critical mining and process equipment needed to complete the expansion of the Molejon gold mine, effectively preventing the Company from increasing the mining rate required by the newly installed additional milling capacity which was intended to compensate for a planned reduction in the average processed ore grades. As a consequence of not having closed financing and despite a significant ramp-up of throughput to the Mill Plant since the commissioning of the fourth ball mill and the other auxiliary equipments associated with the expansion of the production capacity (an increase of 30% in processed ore has been achieved during the last quarter of fiscal 2013 as it was planned), gold mined during the nine months ended March 31, 2014 decreased 62% compared to the nine months ended February 28, 2013, mainly due to said shortage of mining equipment. This effect was further compounded by the recent requirement to share mining and crushing equipment between gold and aggregates production. As a result, gold produced has decreased 77% during the nine months ended March 31, 2014 compared to the nine months ended February 28, 2013. These events contributed to the Company’s inability to fulfill its delivery obligations to Deutsche Bank during the six months ended March 31, 2014. The agreement signed with FQM (see Note 26 to the condensed interim consolidated financial statements for the three and nine months ended March 31, 2014) will allow the Company to completely address its senior credit facility with Deutsche Bank in order to solve the default situation and strengthens the Company’s balance sheet by reducing short term liabilities (see Notes 1 and 14 to the condensed interim consolidated financial statements for the nine months ended March 31, 2014).
AI
