Finanicers not taking much risk hereo_O only about AU$45,000,000...

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apkjm

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25/10/18

11:20

Post #: 36255639
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Originally posted by HAC30 ↑

Enterprise value 10x higher than today, please provide your numbers. That is very contrary to Ballieu Holst's numbers, and lets be honest, plucking a figure out of thin air.

Secondly, the financier really isn't taking that much risk here due to the option to convert to equity. If the company cant afford to pay the interest and principal back, they just get greater ownership of the company through converting the loan to equity. If this was a simple 7% p.a. loan with no equity component I would praise the deal. Converting interest to equity is at lender's discretion. Converting principal to equity may or may not happen. Shareholders can reserve the right to vote on it but if the cash-flow isn't coming in by the time it is required, they don't have a choice. Its debt that ranks above shareholders in the capital structure of a company, if shareholders vote against conversion and the company doesn't have other means to repay the note, they just call in the loan (yes I actually understand how these things work as its part of my occupation to do so).

We can go around in circles or revisit these posts in future. Got the same stuff over at AUZ about how good their Con note deal was. " You dont understand"... "Educate yourself"... haha.

I am not saying the company cannot succeed. I am just pointing out the other side of the story and a possible scenario that could realistically play out.

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Finanicers not taking much risk here only about AU$45,000,000 to some Aussie hackers scratching around for Gold in the DRcongo. Looks like lots of risk to me , unless you are certain of what the ground holds so I'm guessing they know more than us !

Ps. Grams/ Ton and how much is in the ground is all the will matter in the end.

VEC Price at posting: 1.9¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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