Ann: Gemcorp Investment Committee approves US$20m debt facility, page-94

Morning Farmer,

I find it pretty amazing that these LTH are celebrating Gemcrop funding when there are no details provided to investors to make a determination if the deal is reasonable. Would a 15%+ interest rate (nearly double CRDB's interest rate) be acceptable for a mine where there are reports the mine is 80% complete and what is the free margin Gemcorp is offering?

It's easy for the company to say there is no dilution to shareholders going down this route, but is the deal better for shareholders over dilution if the free margin is high and the interest rate is excessive?

Many investors might think it is better to suffer the dilution where you don't have unfavorable loan requirements or have a significant amount of free cash flow going to the lender. If the interest rate is 15-20% over the three years the interest could be around US $9-12mil,
The interest payable over the course of the loan is similar to the funds of BMCG backup, The BMCG funding has no free margin or the risk of loan default.