Ann: General Security Agreement, page-287

@Noobtrader1

It is great news for TSO and the vendor is disadvantaged UNLESS the vendor believes that there is genuine TO opportunity on the horizon, which would be the reason they agreed to this, makes sense, let me explain

• 30 days from the shareholder meeting held on 11 Feb 2021 - The was an agreed 12 month expenditure plan of $7.6 Mil and if the Vendor does not contribute 30% of $7.6 Mil = $2.37 Mil, TSO will contribute our portion (we already have the funds) it will dilute the Vendor's ownership down to 15% and increase TSO's to 85%
• If the Vendor contributes the $2.37 Mil, great, we have some more $$
• However, even if the Vendor does, because we are transitioning into the next stage of development so quickly that say in 24 months time we commence construction and there is an expenditure plan of $100 Mil, I highly doubt the vendor would be contributing 30% of their portion and would effectively lose all ownership.
• The vendor was in a slightly better position under the old arrangement, however, same thing, that under the old arrangement, that when we develop the mine, if they don't contribute their 20% share of say $100Mil capital, they then would effectively lose all ownership. + There was the option for TSO to acquire the remaining 20% share (say $10 Mil Cash), this option no longer exist.
• Put yourself in the Vendor's shoes, why would agree to this? you just costed yourself the opportunity of a cash buyout for the remaining 20% (assume $10 Mil cash) and now if you don't contribute capital to advance the development you would be diluted of most your ownership... People are not stupid. The Vendor knows we are well funded and in advanced stages & on the brink of new major discoveries. The Vendor would know that there has been a number of interest expressed in our project. The Vendor knows there would be a good chance of an Acquisition of the project and would be happy with a 15% share in the project, because if we go on to develop the mine, the vendor is fcked.
• The only trajectory is up for TSO as we are moving at breakneck speed and might even be in for a surprise after the scoping study