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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: Julian Augustus who wrote (9093)4/13/2006 2:48:15 PM
From: LLCF  Read Replies (1) of 78426
 
<What kind of loan is this, that if you decide not to take the loan, or the lender decides not to give you the loan, you have to pay the lender the equivalent of almost 27% of the loan amount? $20m penalty on a $75m loan is beyond usury>

I think that amount is the hedge, no? EPM and lenders no doubt liked that price when they made the deal and so locked it in at that time, rather than later.... not wanting it to decline in price before contruction started. So........ it looks to me that the 20 million is because their hedge lost that much already due to rallying price. If it all blows up of course they have to pay that if they agreed to the hedge sale already (ie. they've been short against what they have in the ground and they don't even own a shovel yet)... those risks were talked about on the other PM thread a couple months ago. OTOH, they have a large presumably (now even MORE SO) economical to mine resource that they now can hedge at an evey HIGHER price. FWIW, presumably the banksters have sold gold short against EPM's contract and didn't want to sit around with that position for a decade while EPM farted around with another lender and other contruction firms. So banksters return, while nice no matter what (hence the term 'bankster'), isn't quite as usurious as it looks. :)

DAK
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