@JID
As always great analysis.
As the lending rules go....if a borrower cannot repay then the lender has the right to repossess the collateral asset. That does not mean the lender is in the business of repossessing all asset wherever they have made a loan. Sprott is in the business of lending money to resources sector. Also the reason management approached Sprott is probably normal bank would not make that loan. I think Sprott analysts understands the resource business more than an average bank analyst.
The fact BDR had to go through this process itself is not a good thing and perhaps maybe the only option available. It is much better than issuing shares at 10-11c.
So if Sprott decided to fund this package, they must have done all the necessary homework.
Sprott is a small investment firm unlike the banks and have to allocate capital very carefully.
In any case, Sprott has got the upper hand. No doubt about it. Just like the banks have an upper hand on any home loan or investment & business loan, etc etc.
That doesn't mean Sprott is 100% right and BDR is a screaming investment right now. They are also taking a punt just as we do. They maybe right and this funding fulfils the foundation for a bright future for BDR.
BDR gets the money and completes all the necessary task to make this mine profitable. Sprott gets their money back with interest & all other benefits assigned to the loan. Shareholders can see their BDR holding gain value. All parties involved receive good outcome. A surge in USD Gold price will be a god send.
OR
It is just as possible that even after this upgrade and completion of all other task, BDR operation still can't generate profit. On top USD Gold price collapses. Everyone involved will lose....even Sprott.
So now I again ask the question .....are those people still continuing to discuss the same issue to ad nauseam level, are trying to make money out of the most hated gold company Or spending most of their time analysing and posting. If they not or can't make money out of this dog, they probably can't make anywhere else. We heard you a 1000 times......now move on.....no point looking at the rear view.
The share price of BDR is at 52 weeks low for all the reason we know, the share price of ABX( Barrick gold), also hit 52 weeks low today. And lot of the largest miners like Gold Corp, Newmont, Newcrest are at or around 52 weeks low. Gold price is at a very good level where all of those big names generate huge cash flow. SLR in spite of being in the best financial position in its life history is trading at yearly lows.
Please Explain all of you GURUS.....Please...
GDX, GDXJ are at the same level when gold was at or below 1200 dollars.(Around 52 week low)
HUI & XAU are close to 52 week low as well.
Please EXPLAIN.....
BDR share price is here for its own doing........why are the share price of the above mentioned name at the lows as well including those indexes ????????
After FED chair Jerome Powell's outlook of a strong economy, the traders bought the dollar and sold gold expecting 4 instead of 3 rate hikes for the year. How many times these traders need to see that is not actually happens. More rate hikes means, more price increase all across the board. Price increase all across the board means inflation is rising. Rising inflaion is always always bad for a currency.Rising inflation means currency buying less. So if the currency buys less the value of that currency will fetch a low exchange rate at the Forex market. Which means USD will go down and all asset denominated in US dollar should go up. If that was not true then Zimbabwe and Argentina would have the strongest currency in the world.
Maybe those traders will need to see a 1000 times to react accordingly. I'll be dead by then.
I think one day these same traders will reverse their action on the hint of a rate hike...i.e sell the dollar and buy dollar denominated asset. Until then we have to respect the herd mentality of these traders.
