Question-and-Answer Session
Unidentified Audience Member
You were going to have an offering to [create] the money for this, and then that was cancelled. And then you did another offering, could you explain to me how that went and also what your cash needs are going to be through the rest of this year?
Greg Johnson
Yeah, the question was in regards to the recent offerings. The market condition is such that, all of you are aware have been very volatile as of lately. Initially we had indications from the banks that we were working with that an equity offering, that there was a lot of demand. I mean gold was near highs, at a $1000 an ounce. But with the market turbulence, when we got into the market to price that, we were looking to do an overnight marketed deal, we just didn’t see the pricing that we felt was fair. Even during any financing, at the current share price is tough for us to do as major shareholders ourselves. And we did not want to do a financing that was going to be a sub $10 financing on an equity basis, even a modest financing.
We basically had other alternatives to take a look at. We’ve been speaking with a couple of other groups about doing basically debt financing, which we really hadn’t been able to do, until we had production very near term at Rock Creek. So with that we decided the equity just really didn’t look favorable, market conditions are much tougher than I think was generally perceived even for the metal space, and we decided to go with JP Morgan on this convertible note.
It was successful, even when we announced, to make the decision to go at 6 O'clock in morning East Coast Time. Gold was up $4; little did we know that some day was going to be one of the biggest drop in gold. Six hours later gold was down 50, but we were still able to complete the deal. We do not know whether the greenshoe will be exercised, but we are bringing in about $95 million for the note issue, the convertible note, it has a coupon of about 5.5%, and it is potentially repayable either in cash or shares, and the shares which I think [1071] Canadian I think was the conversion.
Unidentified Audience Member
(Question Inaudible)
Greg Johnson
That effectively will take us at least through the next 12 months and allow us to do the aggressive program that we planned for Donlin Creek, it will allow us to meet any needs which we think will be modest at Galore Creek, and to be able to invest into exploration around Nome for the Rock Creek line.
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