Trail of thought with rationale12 Jun 2019 02:13
According to the rns on 4th march the aggregate debt owed was CAD1,426,500 which is a snip under £850k.
It also says that Gun invested £250,000 by way of a convertible loan which is in addition to the shares in Oyster.
Furthermore it said Gunsynd's loan represents circa 30% of the total outstanding loan amount. 250/850 is circa 30% so validates the sums.
So circa £600k was owed to Northbay, representing their circa 70%.
Not a million miles from the placing money raised. So that's where the hypothesis started and it kind of makes a lot of sense when I considered it. That GUN use the money to buyout Northbay 70% interest.
High level rationale (no order):
1. The sums add up with the placement amount, and help explain why we may have raised more monies when they already had around 450k in the bank.
2. GUN have already said they will focus attention on HB and madagascar and that the money will be used to assist in progressing possible investment opportunities so I do think monies will be (or should be) directed to one of them.
3. Northbay are a merchant bank and advisory group and it was simply a way for them to collateralise the debt owed so they got something. They don't want to be miners, or risk their debt in a mining license asset. GUN I would anticipate have first refusal. (Albeit I expect Northbay would want a premium above the debt value obvs).
4. The following wording struck a cord with me from the recent rns "We have always maintained our belief in the quality of the Madagascar licence and are now in a much stronger position to pursue a course of action that would be advantageous to Gunsynd shareholders." Key term ...'A course of action'... just sounds like predetermined action. Plus refer back to point 2.
5. It would explain why perhaps slower in agreeing /announcing the license ownership split as even we can do 250/850=30% lol.
So in short, stab in dark. GUN buy out Northbay 70% and pay them a premium to the £600k to secure it and perhaps as a fee for helping arrange some funding they have been working on to develop the license area.
Very feasible to me and personally I would love an RNS like that! As would the share price I believe. All IMO as outlined above.
That said, the placing rns did suggest it may be used more towards the development of the asset where it said "Not only that but it has increased the opportunities within our own portfolio, not least with respect to the Madagascar oil and gas licence. Rather than being heavily diluted by third party investors we can now look at a wider range of options with respect to progressing work on the block".
Far far too late, food for thought. Zzzzz
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