via SEDAR - Material Contracts

The one line I would seize upon(of course, I would) in the material contracts signed in May is the following:

"6. Events of Default: no Default or Event of Default has occurred or is continuing"

You will be relieved to find that the contractual agreement in place is about carrying on business as usual. The agreement anticipates a payment-in-kind transaction through PROCON in doré gold. That means they get paid in gold, or take their cut in operating the mine.

But my disagreement is that the agreement is oppressive to the beneficial shareholders and calls into question basic tenets of proprietorship. The indefinite cease trade order restricts any trade in the shares, and the agreement excludes the right of any buyer of the company seeking to make a hostile bid.

There are also no dividends allowed, but PROCON, who is not an owner of the company, is allowed the appreciation of the gold price once they receive their doré and refine it, and swap the gold for cash.

The date of filing is May 18.

On May 20, Sprott Physical Gold Trust filed a prospectus for the issuance of shares. What this means is that Sprott Physical Gold will be buying gold, but no mention is made from where or from whom. Since Sprott stores at the mint, the mint may also be a buyer. But I believe that Sprott may have a substantial cash reserve with which to resupply as would The Mint, without filing a prospectus. The Mint is under no obligation to file a prospectus, as it's an agent of the crown.

If you've got a taste for a spaghetti plate full of loopholes, have at it:

http://bit.ly/1WMecM7

-F6