It's hard to speculate on this because of the loose terms on the CD. The debt is issued in tranches that, while they do have a term, can be "cashed in" at any time. To determine how much this will affect the future OS, we have to forecast what the pps will be at that time and how many tranches to discount. On the plus side we know that before the increase the 7M included reserve for the debt - which means there wasn't much left they had to reserve for. Not a clean slate, but not that bad either. Guyer seems to practice just in time financing in regards to the cd. This shows up on the Q's as little reserve and in the charts as a gradual drop in pps.
There's going to be start up costs, but the time frame from start-up to production will be relatively short. They've had plenty of time to plan for this period; the upgrades to the mill and HR issues should not be a problem. Will they have the capital? That's a good question. If they don't have any major hangups this summer, pre-production, and investor support remains high - the cd financing could actually turn out well for the OS numbers. All the longs here hate cd for it's high dilution potential, but it has a positive flip side depending on what pps is used as a variable. It's going to get fun this summer.
There are always a few hints in the new Q's.
