"To accelerate the project, it has been agreed between the parties that Velvogen will not itself be required to construct a coal briquette plant. Instead, Metro will supply to Velvogen by March 2010 a plant capable of processing 110 tonne/hour of high grade coal fines."
Doesn't say how much, if anything, Velvogen would be paying for the proposed plant. Will it be as part of the purchase price, in addition to the purchase price or leased to cityview?
"in consideration of the assignment of the Fortitude Minerals Limited loan note of US$10,172,807."
Well this may be written off in Cityview's accounts and their may be no prospects of this been repaid. however, there was always the possibility of having the outstanding loan converted into more Fortitude Minerals Limited with cityview getting a controlling stake in that company. Whether that is worth anything I don't know. However, that looks like been swapped for a 74% in Velvogen. What exactly does Velvogen own? does it have any debt? Will it own the proposed plant or lease it? Will it be in debt to Metro after the proposed plant has been built? There is considerable detail missing about the above proposal as far as I can see.
Regards
SP
CVI Price at posting:
0.3¢ Sentiment: Hold Disclosure: Held
