Discussion -

The liabilities in the balance sheet arise out of nowhere. They could very well be swapped from The Royal Canadian Mint's balance sheet, if the Mint were the counterparty in a swap, or financing arrangement in order to raise capital. You will note that the liabilities do not accumulate or tabulate year after year.

The liabilities recorded in the balance sheet are perhaps also revenue by another name. They are essentially half the notional value of the yearly swap of cash on hand for unrefined doré at the Mint for their ETR unallocated gold programme divided over three years.

The yearly amount the Mint will be adding to their gold ETR would be $220m. To fill out the rauirement of $660 m. over three years. That implies that the company can produce revenue in this amount. But what they receive is 'only' $110m.

This matches the asset-based financing, in that GBN.V may access ~1b. + in capital, but Sprott acquires $2.2 billion in unrefined gold, to be refined at the mint. This capital does not become available until the revenue-based financing is complete.(April 1st. - two years of asset-based production, then three years of revenue-based financing production. The write-down must now occur)

To access this asset-based financing, any shortfall is 'borrowed from the borrowing' - borrowed from the asset-based financing, and topped up to meet with obligations under the revenue-based financing. Costs are paid out of the asset-based financing to meet with the obligations under the revenue-based finance.

-F6