via Wikipedia.org - Swaps

The company might not have entered into an escrow agreement per se. The agreements that are listed under 'Other' with SEDAR may be a series of swap agreements rather than a plain vanilla escrowing agreement, allowing for the balance sheet irregularities:

http://en.m.wikipedia.org/wiki/Swap_(finance)

via Procon Group - Production At The Jolu Mill

The Procon Grouo provided some insight as to the production capacity of the Jolu Mill in August of 2013.

If this was an average production run, then you can make a net present value calculation in terms of ounces rather than dollar figures. The company provides only half the amounts produced, and half the processing power, according to a net present value model of ounces produced.

The original production model is very restrained, and the PEA limited in scope. This was done intentionally.

For instance, if the company wanted all of the production figures to match the original figures from the PEA, and cover up the rest of production by claiming absoluteley atrocious figures for grade controls, or half the production capacity, then it merely fills out the regulatory requirement of a mill with no upgrading, without having to inform you of the gold held in escrow in excess of these figures.

I believe that the company settled the original Waterton Agreement at the end of calendar 2013 of 100k oz., but that there are more ounces held in escrow(which might have been settled finally at the end of calendar 2014.)

So you would subract the original Waterton 100k from the initial production run, which leaves you with a lot of spare ounces for development. I think you would add half a year of production since it's obvious that they've been drawing from stockpiles for the fifth year.

What you wind up with is a total of ounces that would roughly match the total liabilities on the balance sheet. The figures are in gold ounces, not dollars.

Answer:

For the Cash Flow Series
NPV = $281,575.14

Cash Flow Stream Detail

So the figure you come up with is 221k oz. after Waterton is settled. $108m. in liabilities divided by the total ounces produced after Waterton is ~$490/oz. This means the total ounces produced are being costed at this figure, not what they can fetch on the market.

In order that the company achieve this production figure, they would need roughly 900tpd @ 7g/t.

A firmly achievable production run, all hidden within the balance sheet.

Your calculator should have a discount of 25%(costs 25% of production), starting in advance, each period should be '1'

http://www.calculatorsoup.com/calculators/financial/net-present-value-calculator.php

http://www.procongroup.net/news-releases/jolu-mill-pours-gold-bar/

- F6