The guys who attended the recent AGM may have a better handle on he situation (got a better explanation) so correct me if I am wrong

As I understand it the trouble is with a vulture capital company who (in my opinion) already has a very good deal for STK gold in exchange for cash up front (they get the gold for 80% of the going price). Now the vulture company is with holding the last of the funds over some dispute respecting the increased interest STK has in the Edwards property and the decline of Cline's interest (in instead of cash). Thus STK ha been scrambling for cash to keep work going.

Again I figure the company should consider more creative methods of raising capital such as below


STK had that deal with the Vulture Capital guys (they're getting gold at around 1350 an oz) why not with the shareholders.

  1. Company offers one million $20 preferreds (Debentures) to current shareholders (for every 113 common shares held the share holder can buy one Preferred/debenture).
  2. Preferred/debenture and/or the right to purchase the Preferred/debenture can trade on the open market.
  3. The Preferred/debenture pays 7%(???) interest per year (payable when the Preferred/debenture is converted perhaps)
  4. Can be convertible to gold at the rate 75 Preferred/debentures for one oz of gold (Company may need to control conversion rates tied to production perhaps)
  5. Can be converted to common shares of the company at the common share price at the time of conversion (perhaps? gives shareholders more options)

This would give STK a significant injection of cash (20 million) to finance the mining at Edwards (perhaps the purchase of a mill) AND sufficient cash to fund exploration at Schribner.

STK would have to produce 13,333 oz of gold to convert the Preferred/debenture so some of the production in 2012, 13, 14, would have to go to shareholders wanting to convert shares