via Bloomberg - Revenue - Based Financing

Revenue -based financing is very costly. If the company fills out a liability on their balance sheet of $108m. in gold(what else would they have a liability for), and the result is $87m. cash liability at the mint swapped in exchange, the difference is 24%. The mine has the gold and the mint has the cash raised in IPO. They swap liabilities on their respective balance sheets.

This is a staggering payout. When does the liability conclude, or does the capital raise using revenue - based financing continue indefinitely? Where does the gold come from? How is it this company is able to keep functioning without going bankrupt and still make a staggering payout?

Note the picture of the five jars. This is what the company has been doing for the past five years, filling up jars of Sprott Physical ETF, and the mint, raising capital, swapping gold for cash. The only revenue they pay taxes on is the cost of revenue, euphemistically called 'drilling'

http://www.bloomberg.com/bw/articles/2013-02-05/revenue-based-financing-the-better-you-do-the-quicker-you-pay

-F6