Finance and Gold
As most subscribers to our newsletters will know debt finance is a large part, in fact the majority, of the funds we arrange for clients. In last November’s Capital Comment News I reviewed the forms of debt finance available for property and business. The section on development finance for property was rather short as this has been difficult to obtain since the Global Financial Crisis.
As most subscribers to our newsletters will know debt finance is a large part, in fact the majority, of the funds we arrange for clients. In last November’s Capital Comment News I reviewed the forms of debt finance available for property and business. The section on development finance for property was rather short as this has been difficult to obtain since the Global Financial Crisis.
Finance Available
Well I’m pleased to report that’s improved since then - especially as the demand for housing increases in Auckland. TBK Capital is a preferred supplier to a new source of finance for developments from $2 million to $50 million plus. This includes developments that are developer managed, or have no fixed price construction contract, or no presales. We also have access to large - $20 million plus - bank finance at low floating rates.
Furthermore we have a private financer interested in providing interest only first mortgage finance on commercial property in the $2 - $5 million range for one to three years. And there are several non-bank lenders looking to make these types of loans in the $200,000 -$2 million range on both residential and commercial property.
By the way, with businesses we’ve been arranging a fair amount of debtor and invoice finance. The advantage of this form of finance is as the business grows so does the ability to borrow more (not being restricted to the static value of property or plant).
In my last Opportunities Update I said we were looking at some new offers, so here's an update on the Gold Mine.
Gold Mining License
Now here’s one not for the faint hearted.
Our client has a sale and purchase agreement to acquire 80% of a perpetually renewable gold mining license over 160 Ha of DOC land and an adjacent 41 Ha farm on the West Coast of the South Island. Our client also has a sale and purchase agreement for the purchase of the farm.
Geologist reports indicate the existence of a rich vein of gold existing on both properties. The DOC land has been successfully mined for the last 100 years producing up to 100 ounces per day, but only 5% - 10% has so far been mined using modern day methods. The adjacent freehold farm has yet to be mined at all. A full Technical Assessment prepared last March on the potential for the license over both properties is available.
Our Client is seeking $770,000 from qualified investors (the “Investors”) to take part in the alluvial gold mining of the DOC land and the Farm. $600,000 of the funds raised will used to acquire 50% of the Licence. The company will also raise a shareholders loan of $340,000 as working capital to get the operation under way ($170,000 of which will be advanced by the Investors).
100 ounces per day has previously been achieved mining the DOC land using outdated methods. Were both the DOC land and the Farm to achieve only 100 ounces per week, on current gold prices the resultant return on investment would be over 300% per annum.
The company’s preference is for a cornerstone investor who would be interested in taking a significant shareholding in the License. All applications (from potential investors who qualify under the securities Act) to take up all or part of the issue will be considered.
For a copy of the Information Memorandum email or call me on +649 307 3257 or +6421 902 901
The above investment in gold mining is not an offer of Securities to the Public and is available only to eligible investors as defined by the Securities Act, or those excluded from the Offer provisions of the Securities Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. Its is not offers or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.
Cheers
JP
John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 15, BDO Building
120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Fax +64 9 309 4519
Mobile +64 21 902 901
Email john.paine@tbkcapital.co.nz