They also have a $60M loan due June 10, and problems with Venrus?:
In June 2010 the Company is required to make the convertible loan debt principal
repayment of $60.0 million and final convertible loan interest payment of $3.0 million. Management does
not believe the funds described above will be sufficient to make the required debt principal repayment and
interest payment in June 2010.
The Company believes it has financing options which could generate sufficient cash to service the
Company's debt requirement including, but not limited to, the following:
a) Issuance of equity or debt securities; and
b) Refinancing the convertible debt all or in part.
There is, however, no assurance that these sources of funding, or any other initiatives, will be available on terms that are acceptable to the Company.
The Company maintains the majority of its cash and short-term investments in US Dollars. The Company's significant commitments and a large portion of its operating costs are in US Dollars. The Company also maintains necessary cash in BsF and C$, sufficient to fund short-term operating commitments in those currencies. As of the day of this MD&A, the Company has continued to settle its gold sales in BsF.
Practical restrictions currently exist on the ability of the Company to transfer funds from its 50% joint venture to the Company's other subsidiaries. These restrictions arise from the fact that financial decisions impacting the joint venture are made in collaboration with the Company's joint venture partner, the Venezuelan government. These restrictions may affect the Company's ability to use cash resources fromVenrus C.A. to fund the Company's operations or to contribute to repayment of the convertible loan. Cash as at December 31, 2009 includes $0.3 million held by Venrus C.A.
As at April 23, 2010, the Company has $4.5 million in cash and the outstanding $60 million principal portion of the convertible loan is due on June 10, 2010.
