via Business Dictionary.com - Asset-Based Lending

Interesting to note that in the definition for asset-based lending in the businessdictionary.com, they state the following:

"It is a type of 'off balance sheet' financing, and is also called asset based financing, asset financing, or commercial finance."

In asset-based financing, you are amortising the asset against capital, off balance sheet -You can't depreciate the asset against a liability swapped with a third party. You can only depreciate the entire amount for the year through depreciation and depletion of the mine, not subtracted against liabilities that arise in the company balance sheet which are part of another financing, the revenue based financing.

The assumptions in the balance sheet are entirely misleading if you subtract liabilities from those assets. The liabilities are part of another tranche and method of finance, and are swapped with the mint.

In the asset based financing, the assets are ore depleted and depreciated at cost, and cannot be subtracted from liabilities that arose out of the swapping of liabilities in a swap. The balance sheet is misleading, forcing you to assume automatically that you subtract liabilities from assets.

The off balance sheet nature of asset based financing means the true amount of capital raised is not declared anywhere.

You need to know the exact cost of shipping the ore and processing, on a per ounce basis and divide the asset declared yearly against this number.

So, if it's $100/oz. to deplete and depreciate ore, then $80m.divided by 100 gives you 800k oz. for that year, going to the Sprott Physical Precious Metals ETF.

-F6