@Stormy I can't hear anything either but I have conceptual noise canceling headphones. Until now they were as effective as the conceptual mining plan.
Look at JS pretending like he is on a trading desk. TRX shareholders can be pleased that Sinclair is using a 15 year old monitor. So where did all that money for computer equipment go? But really, what is the CEO of a mining company doing watching business television during the day. Shouldn't he be reviewing engineering documents and plans? The picture clearly shows how little effort he devotes to the actual business of the company. Tell me HCTH Annie what do you see? Do you see Pit plans laid out on a table?
There is no cash flow freed up because TRX is not producing any revenue. Reducing a large negative cash flow to a smaller negative cash flow does not create money to fund Buckreef. That only happens in Sinclair fantasy land!
As of Nov. 30, 2014, TRX's cash balance was $724,364. Assume they collected all $737,045 of the VAT refund from Tanzania and assume that the prepaid expenses fully amortized over the quarter. The total available would have been $1,497,513. Add the $816,558 that TRX received from the note sale and the maximum cash balance would be $2,314.071. From that subtract 4 months of cash Administrative expenses (Q1 was $723,582) of about $964,776 and the balance would be $1,349,295. Deduct $123,268 of cash interest and the number becomes $1,226,027. That is a very optimistic number.
My assumptions include not a cent spent on the ground in Tanzania and not a penny of payments towards the $1,983,779 of outstanding accounts payable. Plus, the Note Purchaser is going to redeem another $300K on April 1st which would bring the number down to $926,027.
Realistically, TRX didn't get a VAT refund which puts the current cash balance at less than $188,982 depending on how much the company had to pay to trade creditors. Running on fumes.
@Goldabanks and Wild_Gold feel free to offer your own fantasy projections. TRX hasn't produced an ounce of gold so there has been no revenue.
Sinclair just announced it. He didn't say when the Early Repayment Event happened, but it was triggered over a week ago. He waited 24 days to let shareholders know that the Note Holder redeemed $750K.
So this post of mine was wrong? This is what Sinclair is trying to disguise as a restructuring.
Quite simply, it is the end of whatever remote hope shareholders had.
I am quite sure that by the end of the month, JGB Capital will have notified TRX of its election to redeem $750,000 of principal. Since the registration statement for the stock issuable upon conversion is not effective, the Note is in "Stock Off" condition and the redemption must be paid in cash. There goes that $750,000 of cash from the initial draw that TRX is required to hold in a US Bank.
If the Volume Weighted Average Price is less than $0.40 on each of the next two trading days, then the lender will issue a demand for Early Repayment and the roughly $7.5 million held in escrow will be returned to the lender. I can't see anyway that the lender does not exercise the early repayment demand. If this happens, there is absolutely no more cash forthcoming from the Note Sale.
Here are other things you are waiting for:
1) Electrical power sufficient to power Buckreef
2) Completion of the CIC Plant
3) Leaching to begin
4) Approval to operate at Kigosi
5) Updated production guidance for Buckreef
6) An economic analysis of the new low cost mining plan
7) Insiders to buy a single share of stock with their own money on the open market
8) Pigs to fly...
What indicates that Sinclair is inept is the reference to the free market pricing of bullion. Managements of other companies in extraction industries, like oil and iron ore producers, understand the pricing dynamics. When demand is low, the price for the commodity or precious metal declines. In the short run, supply and demand dictate the market price. The cost of production only effects long run supply. In the short run companies will produce at a loss as long as they cover their average variable cost. In a low price environment, high cost producers go off line eventually reducing supply and supporting the price. Gold is no different. His inability to grasp these simple economic concepts demonstrates that he is ill-equipped to allocate capital and run a mining company.
They took back the funds because it makes the IRR for their investors spectacular. It will be a tremendous rate of return when the lender acquires all the mining licenses for the $1 million that was actually lent to TRX.
The spin is that by having the money yanked TRX avoided dilution.
Somehow it was a great deal for TRX to net $736,558 and have to repay $1,450,000 plus interest. I don't think that amount of money bridges the period until the elusive 1st Pour.
(Here is the calculation:The initial draw was $1,766,558 less $200,000 paid to Forefront as a fee, less $80,000 of expenses, less the March 1 redemption of $750,000 equals $736,558)
According to Sinclair logic, the real victory is the lender yanked all the cash which reduced the principal amount of Notes outstanding which reduced the number of shares issuable upon conversion. Shareholders have reclaimed all the upside!
Not much of a restructuring. Most of the press release covers events that happened according to the original terms of the deal. On March 1st the lender exercised its redemption option clawing back $750K of the $1,766,558 initial drawdown. They didn't even wait for the end of the month and the possibility that the registration statement covering the common stock would become effective so they could receive a bigger payment in common stock. Again, what was the purpose of having a redemption option before the 1st milestone date? It signals that everyone knew that TRX would never reach the first milestone.
Sometime after March 16th, the Lender exercised its rights to demand early repayment, the Early Repayment event. As a result, the lender took back approximately $7,433,442 that was held in escrow for potential release at the Milestone dates. At this point the outstanding Principal Amount should have been about $1,816,558.
Here is the restructuring part. The $1,816,558 amount owed was reduced to $1,450,000. To get that $366,558 reduction , it appears TRX paid $175,000 in stock. So out of the $800,000 original issue discount, the lender forgave $191,558. No money changed hands. TRX still owes more than the cash it received. It still leaves the lender with all the assets of TRX's subsidiaries as collateral.
If the registration statement for the common stock is not effective, TRX will probably have to repay another $300K in cash during April. Since the lender hit TRX with the redemption election on the 1st of March, they will probably issue notice on April 1st. I don't think that TRX has that kind of cash left.
The biggest joke is that the lender is "entitled to advance up to an additional US$4,000,000. They just clawed back all the money they could. Do you really think they are going to turn around and lay out $4,000,000?
You better be careful what you wish for. Management lied at the AGM in Feb 2014. The Chief Operating Officer in Tanzania Philip Kanicki state that the company would have a 1st Gold Pour in September 2014. There is no doubt in my mind that internal documents would show that was a fantasy. The Chairman and CEO as well as the President were present and let the announcement stand without correction. A class action suit could seek damages of about $200 million since the stock declined from $2.50 to roughly $0.50. The class would include anyone who held or anyone who bought between the meeting date and June when the company failed to achieve their stated objective.
Keep in mind that the when announced at the 2014 AGM, the first pour was supposed to occur in September, and material was supposed to be on the leach pad and leaching was to commence by the end of June. Management has never explained the delay. Here we are nine months after the original target date and HCTH Annie is touting the "progress". Laughable.
The pictures are a way to show progress without updating the production targets or economic analysis. I think that management would have shareholders keep the old production targets in mind despite the fact that the mining plan to reach those targets has been abandoned.
Read the whole report. To extract the two million ounces TRX needed to invest around $250 million. The report specifies the project NPV not the return to TRX which would be only 55%. The mining plan contemplated by that report was abandon when the price of gold dropped. The new low cost mining plan cannot achieve those production targets and no economic analysis was performed or new production targets set.