via Wikipedia.org - Companies' Creditors' Arrangement Act

I was thinking that I would never manage to have the pieces fall into place without reading enough to obtain a corporate law degree. But I finally read the article on CCAA.

GBN.H is in CCAA. The company makes no mention of CCAA, or notes CCAA in their filings. They expect that people would merely not notice. The only way they can obtain a stay of proceedings is through CCAA, or obtain a DIP financing. They are very anxious that people not know about their intentional venture into CCAA, used as a business strategy.

GBN.H is a pariah of the gold space. If they had not made themselves into pariahs over the years by lying to people about what they're doing they almost certainly are now by invoking CCAA. In the article, you see Kitco went through CCAA.

One thing I have wrong is that the company IS insolvent on the balance sheet, on the basis of accounting insolvency, based on the fact that the liabilities exceed the assets.

Assets on the balance sheet in 2011 - 2012 fiscal years represent perhaps the amount of financing through capital raise, but can also represent the Asset-Based Financing to supply gold as both amounts are equivalent. The assets are the gold supply costed at processing per ounce, rather than money raised and spent on buildings. The gold came out of the EP Mine, which was apparently operated from 2010 - 2015 calendar years, and initially provided the 'Pay Streak'. The asset-based financing was the first tranche.

Assets on the balance sheet disappear once liabilities appear in fiscal 2013 - 2015, which represent perhaps a second tranche, which is 'borrowed from the borrowing' that, once implemented, creates a pro-forma default. (~$330m tabulated over three years) I presume the revenue based financing to have been implemented over the winter, calendar 2015-2016.

The way to resolve this pro-forma default is to use a DIP financing, which is the vehicle for the asset transfer of the asset -based tranche, and the method of changing the priority of the first ranking charge over all the assets. The cost of capital from capital raises plus operational monies used over five years added to the second tranche is the cost of capital.

The Asset-Based Financing covers the cost of capital. (~$620m.)

https://en.m.wikipedia.org/wiki/Companies%27_Creditors_Arrangement_Act

-F6