The key issue with BGL, page-54

Macquarie Bank was the senior secured creditor for Calidus (CAI). They put them into receivership. If there is an opportunity to realize profits and de-risk, they will take it.

It states very clearly in the loan documentation:
The Project Loan Facility will be secured. If events occur such as the Company failing to comply in all material respects with the terms of the Project Loan Facility, breaching a representation or warranty; or the occurrence of an event of default or review event under the financing documents, the financiers may terminate the debt financing or otherwise elect not to provide the funding.

The debt facilities and their continued utilisation remain subject to conditions and warranties customary for project financing, including demonstration of continued funding sufficiency, minimum account balances, debt servicing and ongoing information requirements in accordance with specified timelines and at the time of each utilisation.

So investors have several items to ponder upon:
1) breaching a representation - is the stated reserves accurate? Why is the production not to guidance?
2) occurrence of an event of default - is BGL up to date with paying their bills?
3) Review Event pertaining to a failure to meet a performance condition - is the production able to meet the hedge delivery?
4) demonstration of continued funding sufficiency - cash is running low, production not making enough money to plug cash burn
5) minimum account balances - debt service cover ratio could be in breach of financial covenants

Is the suspension a result of a Review Event pertaining to a failure to meet a performance condition? Is BGL in breach of any loan covenants? Was there a default event? Is the lowered production unable to cover the hedge? Were the stated gold reserves misrepresented? If yes, the bank can exercise their right over BGL assets.

Financial ratios and performance covenants are tested prospectively and for each quarter as they occur. The March quarter just ended. The quarterly report should be due next week.