Thu, Apr 17, 2014, 6:20 PM EDT - U.S. Markets closed


% | $
Quotes you view appear here for quick access.

Comstock Mining, Inc. Message Board

  • whatisallthisthen whatisallthisthen May 22, 2013 1:49 PM Flag

    How did they save $325,000?

    Can someone explain how LODE was able to save $325,000 by buying gold to pay off Auramet?

    Consider the following when answering:
    1: the loan was non-interest bearing so they are not saving money on interest payments
    2: the loan was paid off by delivering a set number of gold ounces and they are not delivering less ounces

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I believe that the way that is calculated is as follows:

      1. They were credited $1600 for each ounce of gold delivered.

      2. Present value of each ounce is substantially less- around $1400.

      3. The repayment required fewer ounces to be delivered than would have been if the metal was sold at market price.

      4. The difference in the value of the ounces of gold actually delivered versus the number of ounces that would have been delivered at market rates totals $325,000.

      So technically, it may not be "savings" in dollars, but it is "savings" in retained metal, that they can then choose to sell or hold until prices are more advantageous.

      • 1 Reply to northbayclay
      • Again the 10Q clearly states that the loan was to be repaid by delivering 3720 ounces of gold in 12 semi-monthly 310 increments. LODE was not paying off the loan in cash. It doesn't make sense that Auramet would agree to receive fewer ounces if the price of gold went down.

        Auramet loaned LODE $5M against 3720 ounces at a book price of 1600/oz. There was no interest on the loan so Auramet makes its money off of the difference between the (3720 * 1600 = 595,200) - 5000000.

        Their bet was that gold would remain at that level or higher and they will make that or more. The 1600 figure has to be for accounting purposes for calculating profit/loss when they sell the gold.

        Since the number of ounces is fixed and the $1600/oz is fixed how does buying gold save LODE money?

    • Assuming you aren't trying to be a smart*** CRA member or just ignorant to facts, I will give you your answer. From the recent press release "Due to the recent decline in gold prices, the Company prioritized repayment of the Revolving Facility, opportunistically delivering ounces below the forward sales price and exploiting the hedge."

      Consider the following when responding:
      1: You should probably re-read the entire press release and listen to the last conference call.
      2: You should learn what it means to 'hedge.'

    • Wait for the board IDIOT maxine to reply with some Psycho Anal-ysis of how this is determined!!!
      And I'm sure it will be a well THOUGHT out Process!!! LMFAO!!! Or maybe better yet Da'Gas will reply to your answer!!!!!!!!!!!!!!!!!!!!

      Sentiment: Strong Sell

1.69+0.04(+2.42%)Apr 17 4:00 PMEDT

Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.