You raise some valid points and I appreciate your logic but the fact remains, what are the events that trigger a default? That is the most important unknown in this equation.
I see the conversion price as a bit of a furfy and I have seen situations like this before where the lender is happy to incorporate a conversion price into the agreement at the borrowers request, so that upon face value it appears to the market that the lender "believes" in share price upside and that is why they are happy to take a higher conversion even if the lender has no intention of conversion.
Secondly why wouldn't the lender allow this? Its a free kick. If by some chance the company gets it right then they have a free call option over being able to convert into equity so the lender wins either way?
You said yourself
"There seems to be a huge amount of negativity and suspicion over a facility that seems more in favour of CDG and the shareholders than most debt facilities I've seen offered to unprofitable and speculative mining companies. Let alone ones not operating in their home environment."
This is why I'm asking the questions I am, if its too good to be true then what's the catch? Given the company's appalling track record on delivery and the minimal production ATM which certainly isn't profitable, time is running out and 2 months has already passed of an 18 month facility which will go by fairly quickly.
Interesting that the company preso just released doesn't address these issues again.
DYOR
CDG Price at posting:
8.2¢ Sentiment: None Disclosure: Not Held
