new year, new debt restructure

Greetings ALDers, I hope you all had an excellent festive thingy and I look forward to another year of discussion. If last year is anything to go by, the comments will be low in quantity but very high in quality; I've learnt a lot and appreciate your insights, so I'd like to offer a personal thank you.

Our first management offering this year is maybe a bit of a surprise and certainly interesting, I'm still trying to work out what reading the goodorbadometer will give us.

A few comments at this stage:

1) I can't work out what currency the cash ALD gets given is in. Presumably USD?

2) While the deal isn't hedged, my reading is that the banding between $1400 and $1600 is a good thing if the gold price plummets, and a not so good thing if it soars. But if ALD is producing 200koz at $2000/oz no one will care. So there's a bit of pseudo implicit hedging involved, if you like; essentially the people supplying the loan are banking on making a big return if gold goes ballistic.

3) While I understand that there have been plant upgrades and the like, I still had trouble working out Where All The Money Went in the last six or so months. Company success for ALD is dependent on the cliches true of any company: get expenses down and generate a steady stream of income. A cost per ounce with only three digits in it would be a good start. I hope that this debt restructure does not give management permission to be lazy with the money.

4) It's not clear that this will completely eliminate zog's concerns about cap raising and dilution.

5) My superficial reaction over all is: this seems quite good actually. But if that's naive then I'd love to hear your comments.

Best regards everyone