Yes, 20% is excessive, but pointing to that as evidence something is wrong with everything else within the company and the quality/quantity of the deposit is ignorant.
So now the company has money. Frank's money. ONLY Frank's money. If this is some kind of scheme, and the resource estimate is a complete sham, and production isn't coming, then: 1) the CTO doesn't get lifted, 2) FRANK DOESN'T GET HIS MONEY BACK, because the company will be broke, and will not be able to raise money (even if they were allowed to try) if they held guns to investors' heads. How does that make this loan benefit Frank? Use your logic, rich guy.