trojan in the barn, page-5

G'day bluestone.
I agree that the longer the time before the loan is taken up that that will give more time before it is due for repayment.
You say, "it is secured against some of Citigold's assets($30mill)", but that is my point. Once the loan is activated they are at the mercy of the Dubai Group should they not be able to pay.
I do not know how the loan is to be repaid, if it is in installments, or as a lump sum in 2.5 years. Maybe you know?.
If however it is in installments then they will not want to miss any payments as they have done with the interest to brownbag.
Anyway it won't make much difference because if they become insolvent, for any reason, the directors will have no choice but to put CTO into volontary receivership and it will be game up. To me, $10 million is a lot, and it would last me a life time, but to CTO trying to operate a huge gold mine it is loose change, and it will be gone in a flash if they do not have production of gold to give them cashflow.
The Dubai Group, as secured creditors, could then make an offer to the liquidators for settlement of the debt, and you can bet your bottom dollar that it will not be overly generous.
So the Dubai Group will be in a no lose situation once the loan is activated.
They can convert their equity to shares if CTO manage to pull it off. Then they also have the options which should be well in the money if things are going well at the time, a nice deal, no?
But if they are secured creditors and could convince any possible future liquidators that $25 mil will satisfy the debt to them and give the shareholders 5c back in the dollar !!! strewth that is a good deal as then they would own the whole thing.
What is it we are always told - 10 million ozs with all the other benefits of being in Charters Towers??.
Put in some management who can actually deliver and bingo!!!
Good luck to them.

Regards

Lockitt