via PWC - Defeasance

In the Price Waterhouse Coopers 300+ page accounting manual under IFRS, the condition the company has entered into is called a Defeasance. Quite curiously they have also come under the BIA in the process. I am wrong with the assumption that they could never allow the company to go bankrupt, it was what they were aiming for. They engaged a structural insolvency by using a balance sheet insolvency where ther were no assets and liabilities that appeared out of nowhere, without borrowing. But the pro-forma bankruptcy leaves room for extinguishment.(and we've seen extinguishment may mean changing the designation of common shares for preferred)

Instead of entering into a performance bond, they entered into a defeasance irrevocable trust.

"3.8 Debt defeasance

A borrower may enter into a defeasance, or refunding, arrangement with its lenders in an effort to derecognize its debt liability. A defeasance arrangement is generally a legal defeasance of the borrower’s liability to the lender, not a payment by the borrower to the lender.

Defeasance arrangements may involve the borrower transferring an amount of high quality financial assets sufficient to service the debt obligation to maturity (or to an earlier call date) to an irrevocable trust. The trust undertakes the obligation to service the debt using the assets it has received. Although assets may have been transferred to a trust, the lender may or may not release the borrower as the primary obligor."

The high-quality asset transferred was the unrefined doré. The company has also now avoided disclosure requirements by becoming a non-reporting issuer. But by saying they're a non-reporting issuer with a voluntarily de-listed stock means they are to continue as a going concern.

http://www.investopedia.com/terms/d/defeasance.asp

$VIX Weekly

A significant hedging opportunity may have come up in volatility futures. Every summer since 2014, there's been a spike in volatility futures. This small summer spike is followed six - eight weeks later by a much larger spike at the end of summer or into the fall. The spike during summer this year was much larger than previous summer spikes, so the spike to follow aught to be just that much larger.

We are into the ninth week since the summer spike.

http://schrts.co/3GV9k5

-F6