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Jaguar Mining (JAG), struggling with debt, arranges a $30M standby credit facility, but TD...

Jaguar Mining (JAG), struggling with debt, arranges a $30M standby credit facility, but TD Securities thinks the terms look punitive. TD estimates JAG's effective interest rate is nearly 16%, and interest and upfront payments in the first year amount to $5.3M. The deal does provide breathing room, but it's just a short-term patch; JAG still needs to address its balance sheet with a “larger solution” in the near future.
Comments (2)
  • klondikefever
    , contributor
    Comments (16) | Send Message
     
    Everyone is waiting to see how the cost reduction programs are coming along. If successful they would be cash flow positive, and have substantial cash flow thru 2013. Would have been nice to see them sell an asset like Gurupi which the market gives them no credit for anyway, has been my thinking. ?
    New CEO David Petroff is highly regarded in the industry. Considering JAG's past performance it's hard but have to give him the benefit of the doubt here considering risk/reward. If they reach their goals, $4.00 valuation is not unreasonable at today's gold price, especially if they reduce debt by selling Gurupi. Nonetheless, this financing is better than issuing 30 or 50 million new shares don't ya think?
    30 Oct 2012, 11:44 AM Reply Like
  • klondikefever
    , contributor
    Comments (16) | Send Message
     
    Let's not forget tax loss selling is just around the corner. Look for good deals. JAG could have some good news, or gold, between now through then; so ?.
    30 Oct 2012, 12:58 PM Reply Like
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