via Wikipedia.org - Revenue - Based Financing

GBN.V's misleading balance sheet full of loopholes with no declaration of earnings in years may actually be Revenue - Based Financing.

The amount of capital they'd raised using this financing remains a secret, but you can compare Sprott's Physical ETF quarterly reports and The Royal Mint's quarterly reports for their physical bullion fund on how much money was used in the liabilities' column on their respective balance sheets.

Notable to the discussion is the term that Revenue - Based Financing is usually contracted for, which is five years.

The line that gives it away is the claim that taxes were paid for drilling programmes. If the tax holiday for new mines is still in vigour in the province of Saskatchewan, that means that this is actually taxes paid on cost of revenue at a rate of 15%.(cost of revenue, meaning 'cost to mine' - not just drilling) This is why the balance sheet is so entirely misleading.

Noting that the company pays taxes on cost of revenue, which are written off quarterly, means they are still in operation, drawing from stockpiles or stopes as the case may be.

But there's another wrinkle, apparently they pay as much interest on The Waterton Agreement as they do on declared taxes on the cost of revenue, so these taxes are written off quarterly. The Waterton Agreement is a lending agreement, or 'swap' that makes GBN.V counterparty to the mint.

Conclusion - The Sprott Gold Note agreement, completed in calendar 2013, and The Waterton Agreement represent two different tranches of Revenue - Based Financing.

https://en.m.wikipedia.org/wiki/Revenue-based_financing

http://www.investopedia.com/terms/c/cost-of-revenue.asp

-F6