Not to worry, a little rain makes the grass grow. <ggg>
I agree that nobody would simply give $30 million away, esp. in a fledgling company using cutting edge technology, unless they had done intense due diligence and decided that the risks are outweighed by the potential rewards. Although we do not know the details, it appears that a major concessions by Maxam was to agree to provide metals to the funding company at a discount. This, of course, assumes (1) production will eventually occur, and (2) it will occur at costs that are reasonably low enough for Maxam to sell the metals at a discount, and stay in business.
We have only sketchy details at this point, but we do know that stock is not being swapped for the funding, stock will only be used as collateral, which is good because (1) there is no dilution, and (2) the stock cannot be sold while it is used as collateral. Thus, 50 million shares are tied up for the foreseeable future. Also, the only property collateralized is that on Peoria 7--the vast remainder is unemcumbered. Note also that production is to commence by 2002--kinda far out there, but at least Dale has now given us a date certain to which he is contractually obligated.
I agree that more info is needed to fully evaluate the effect of this funding agreement. I'm just happy that a deal has been struck, because without one, this company would be in limbo. I hope and expect that Dale will provide a little more detail at the AGM, even if no "final signings and filings" have been performed.
Best regards, Otter |
