I see they have all their permits and approvals.
Looks like SGM will to need to find the "Mother Lode"!
The Company has drawn down all of the RMBAH facility as at June 30, 2012 in order to fund the construction and development of the Lincoln Mine Project. Under the original terms, repayment of the RMBAH Facility was required to begin at the end of July 2012, the 13th month from the first month of the draw down. In July 2012, the Company
negotiated a new delivery schedule. Under the new schedule, the Company will deliver a total of 54,942 ounces of gold with the first delivery in January, 2013 and the last deliver in October, 2017. Under the agreement, the Company will deliver to the lender approximately 50% of the project's estimated monthly gold production subject to a minimum of 900 ounces per month. Total gold production deliverable to RMBAH under the original schedule was limited to 53,027 ounces. The Company has the option of pre-delivering against the facility at its discretion. For the gold delivered as repayment of the prepaid gold facility, the Company will receive $942 per ounce, and it will receive market price for the remainder of the gold sold.
During the three and six months ended June, 2012, the Company recorded a mark to market loss on the RMBAH Facility of $1,957,500 and $7,044,100, respectively. The mark to market is calculated as the difference between the spot price of repayable gold ounces (31,463 ounces at $1,566 per ounce) as at June 30, 2012 and the aggregate of the agreed upfront payment price of $377 per ounce plus the delivery price of $942 per ounce ($1,319 per ounce). There was no such adjustment during the three and six months ended June 30, 2011 as the facility was obtained in June 2011 and not drawn on until July 2011.
We believe additional funding is required for liquidity and to complete the mine.
The Company intends to raise additional funds through either additional debt financing and/or the sale of equity
investments, or by attracting an industry partner to provide additional capital to complete the mill construction and the
mine development in anticipation of putting the mine into production. On April 25, 2012, the Company announced a
non-brokered private placement for aggregate gross proceeds of up to $15 million comprised of up to 42,857,142 common shares at a price of $0.35 per common share. However, there is no assurance that the financing will be completed as announced.
If they are on schedule then they should begin mining now!
