KCN is probably going to have take this loan otherwise they may...

KCN is probably going to have take this loan otherwise they may not be able to get plant 1 operable and fund the restart of mining operations which could then enable them to generate enough income to meet its obligations.

We are getting to the pointy end of the year after which the company will have report the true financial state (in this case its half yearly report) with all of its warts and details of actual cash on hand. debt, and accounts payable.

While the headline interest payable on the loan is reasonable, you need to add in 0.75% royalty payment (USD15 per ounce if the gold price is USD2000), plus the OID of USD 526,000 that adds around 9% to the real effective interest rate  on a 6 month loan - ie KCN borrows USD11.5m but only recieves USDUSD10.740 but pays interest on the full $11.5m if that is what is drawn down).  see OID definition

https://www.investopedia.com/terms/o/oid.asp

Once executed the agreement provides for KCN to pay 2.5% on any undrawn balances on the loan.

There may be other hidden cost as well - eg what is the cost for early termination of the loan?

Unlike its existing loan with a KCN director at 12%, this loan is secured against KCN's assets (details not specified in the announcement), and puts the company at geater risk.  We should be grateful for the current friendly loan from the director instead of criticising it.

This loan signifies that KCN can only get a loan at loan shark rates and while its not large it does place the company into a much higher risk position compared to where it previously stood.

No doubt the money will be used on lots of important things such as feeding the locals, paying exorbinant refining fees, keeping up appearances, and holding onto the Chile project at an annual cost of around $6m.

I would have preferred if they had raised another $25m more during the last CR.

And people are dreaming about using the loan funds to be used to buy back shares - there are so many delusional shareholder here that want to believe in fairy tales and unicorns.

As for the exploration results announced today and many other times in the last 2 years, there is nothing there of real substance.

Fortunately we still have TAFTA to fall back on, but for how much longer,

I suppose if things get really desperate there will be another CR - the Thai refiner is really putting pressure on KCN by delaying payment to KCN - perhaps intentionally.

With the two loans plus the need to pay the Swiss country risk insurers millions, it will be years before KCN dreamers get a dividend.  The profit expectations that have been posted here are simply over the top.

KCN needs a refreshed management team that can cut through the crap and either get some normal mine operations (and tax/royalty structure) in Thailand or enforece TAFTA.  The departure of our general manager in Thailand indicates there was something wrong - he did a great job getting plant 2 operational and extracting the maximum from it.

I still hold a useful number of shares on hopium but my focus is now with other goldies.

Calls for to use borrowed fund for buybacks provides me with a lot comic relief.

I believe there is considerable potential at the Thai mine, but actually delivering good outcomes is going to be very difficult if not impossible.  Howevr, KCN may go for a good run in a goldie bull market if it can surivive.

GLA.

loki