This from the last PR dated Monday April 10, 7:14 pm Eastern Time
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Company Press Release
Consolidated Silver Tusk Mines Ltd. Issues Announcement
VANCOUVER, B.C.--(BUSINESS WIRE)--April 10, 2000--Consolidated Silver Tusk Mines Limited (CDNX:CKS - news; the Company) would
like to notify its shareholders and all other interested parties of the Company's new corporate address, namely; 1750-999 West Hastings Street,
Vancouver, B.C. V6C 2W2.
Consolidated Silver Tusk Mines Limited (the Company) would further like to announce the successful negotiation and execution of a Convertible Loan Agreement with a private
international investment company. Under the terms of this Loan Agreement, the lender has agreed to loan to the Company, an amount up to a total of USD$2 million. The loan has been
structured as a credit facility, which the Company may draw against for the purpose of completing the expanded production plant at the Company's Indonesian property located on the
island of Sumatra.
In addition, the Company will utilize the loan proceeds to fund short-term corporate overheads until such a stage as the Company reaches maximum production capacity. The loan is
secured by a debenture against the Company's assets and further provides that the principal sum outstanding may be converted into units of the company, at the option of the lender, @
0.20 per unit during the first year, and @ 0.22 per unit during the second year. A unit consists of a common share and a non-transferable share purchase warrant. Two share purchase
warrants will entitle the holder to acquire one additional common share in the capital stock of the Company. The funds advanced under the loan arrangement are to be repaid on or
before March 1st, 2002.
As part of the transaction, the Company has agreed to issue as a bonus, non-transferable warrants to the lender having a value equal to 40% of the value of the credit, which shall entitle
the lender to purchase shares of the Company. The warrants will have a term of two years, and shall be calculated on the date that the lender makes its first advance to the Company,
and on a quarterly basis thereafter during the full term of the Loan Agreement.
The loan proceeds affords the Company the opportunity to complete its new production mill, which shall incorporate the existing mill. The upgraded existing mill equipment will in the
interim three-month period be used for gold recovery, and shall be in operation until the newly planned plant expansion has been completed. Upon completion of the new plant, the
company will be able to recover Au, Ag and Mn. The estimated cost for improving and expanding the existing mill will be US$1,25 million, and this expansion process is expected to be
completed over a 90-day period.
The Company plans to generate immediate cash-flow through its initial production activities, scheduled to start this week, and to substantially increase this cash-flow, following the three
to four month period that it will take to complete the installation of the additional plant equipment. The Company feels confident that they will repay whatever principal amount had been
drawn from the USD$2 million credit facility, prior to March 1st, 2002. Through the existing mine plant for which the new production mill has been designed, the Company anticipates to
show a profit within it's first twelve months of operations.
On behalf of the Board of Directors,
``William Van der Merwe''
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Now, don't you think they (management) might have known from the git-go that this deal just could have an impact on who controls the company? With the shares that could be bought at $C 0.20 with that $US 2.0 and the warrants and all, DILUTION will be so great that anyone who bought a year or so ago will need to wait a very long time to see a reward - if ever.
Could this 'private international investment company' have a close relationship to people on the Board? We don't know from the PR.
Where is the announcement that production has started? Looked like it was imminent - "immediate cash-flow through its initial production activities, scheduled to start this week". That was back in April/00.
This deal smells as bad - if not worse - as anything the former bunch cooked up.
Warning! Warning! Warning!
To those not already hooked, look hard and long before you leap.
Brian |
