I notice that on the oly May 8th news release, they never mentioned the rather important fact that the JJNICL credit facility is secured by a second charge against our Redstone mine and mill and a first charge against the leases:

"On May 8, 2008, the Company announced the completion of a $15,000,000 USD credit facility with Jilin Jien Nickel Industry Company Ltd. ("JJNICL"). The credit facility allows for funds to be advanced in tranches as a prepayment for nickel concentrate to be shipped to JJNICL. The advances bear interest at 9.71% and are repayable within one year of the date of each advance. The Company has committed to ship 20 tonnes of concentrate per day to repay the advanced funds under an amended off-take agreement. The shipments to JJNICL will commence in the third quarter of 2008. The credit facility is secured by a second charge on the mining lease associated with the Redstone mine and mill and a first charge on the two remaining Redstone leases."

Note also that 20 tonnes of concentrate per day will be going to JJNICL to repay this loan and that this will be lost revenue during this period (it's going to take a lot of nickel to pay that off at these prices). I'm not sure what the concentration % is, so I can't work it back to actual tonnes of ore to see how much of our production will not be earning revenue for us.

Note also on the Salman debt financing:

"The promissory notes are secured by a charge on the two mining leases associated with the Redstone mine and mill and the McWatters mine, and other assets used in the Company’s mining operations."

I really do see management between a rock and a hard place right now. They can't suspend operations as that will leave them with no cash flow to repay these loans over the next 2 years (the money is already borrowed and spent). And they may not make enough cash from full production at these nickel prices to raise the funds even if they are operating. I guess we'll have to hope that when we start full production, if cash flows are insufficient to pay off our debt obligations, we will still be in a healthy enough position to attract alternative (and more favourable) financing to pay off Salman and JJNICL.

Fingers crossed.