Way Oversold!, page-24

Let's examine this more closely.

A royalty is normally payable from gold production. A loan is independent of production and is based on certain commercial repayment terms and possibly interest applied on the money lent.

The cash flow report shows $1,759,000 million during the quarter paid under the funding agreement see below


This is what the cash flow report says about the gold stream financing arrangement (see below)


The terms of the agreement according to the above description are couched in terms of a royalty not a loan.

The words used are "entitlement to receive 20% of the gold produced"

Page 3 of the quarterly activities report says "During the quarter 219.53 ounces were produced".

20% of 219.53oz is 43.906ozs.

The cash flow report says payments were made under the Cartesian financing arrangement equivalent to 1,000oz of gold. Presumably the difference between the $1,759,000 paid and the value of 43.906ozs of gold came out of the company's treasury which has been funded by investors subscribing for shares under capital raisings.

Even if the minimum 17,600ozs was payable quarterly over 3 year that would be 1,466.66 ozs per quarter, more than what has been paid this quarter.

As I said before I haven't ever seen an announcement from the company declaring commercial production from Cascaval, so it could be argued based on the description of the financing arrangement above, that no money is payable under this arrangement at all.

If I was a shareholder I would be ringing the company to ask for clarification on the terms of the financing arrangement because it doesn't look like a royalty on 20% of the gold production to me. I'd also be asking what the maximum quarterly repayments are under the financing "arrangement". Esh