The directors tell us BS is worth between $50 and $70 million according to an expert.
Yet they offered this asset as security for a $3million loan paying 15% interest rate. . Wonder what the default rate is.
That is:
They were willing to put at risk a $50-70 million asset for a $3million loan to develop a risky narrow vein mine. And that loan was repayable within 6 months of drawdown, ie about now.
I think the Bible says something about loans like that!
Why the hell would you do a deal like that versus a placement for $3million?
One of the directors, Cooke , put in $500k to this loan syndicate. His money was safe, on default the syndicate had security over a $50million asset. Plus he got 15% and options.
What if a syndicate member now plays hardball and wants there money back? The loan is repayable within 6 months of drawdown. Guess what, they get BS if the company defaults. It defaults if it does not renegotiate payment terms . Nasty.
These guys made a really big mess of this. Now the company is in distress. We went from a cashed up junior with a great asset to financial distress in 12 months .
Welcome to the world of junior gold mining .
AWV Price at posting:
2.2¢ Sentiment: None Disclosure: Held
