Koala - As a banker, I'll try and explain how I would look at this and then we can throw around some ideas....maybe a bank/insurance company out there will read it and get on board!

First, being a publicly traded company, I would want to determine if the company could service the debt payments on the required note. Given their cash flow history, this would be an obvious 'No', but this is more of a start-up than it is a transition, as production vs. exploration = cash generation vs. cash burn, respectively. With that, we move on to the next areas of analysis

1. Experience - how long have the owners been doing this, in detail? Successes, failures, etc. This would be a big factor for me.

2. Collateral - besides shares being pledged for this, we would need a true first position lien against the entire property they own, any findings and rent payments received from leased property. This is where it becomes very tough to determine the value of what is being pledged...b/c some of the reserves seem (to me) a given, while a portion of them are still a bit speculative. Keep in mind that a bank may look at this and deem it worthy of some funding, but they have to be able to show how the loan is secured and the value of the underlying asset. If they cannot place a hard value on this, they risk taking a huge hit by compliance and then their cost of funds could go up substantially...hurting the profitability on all of their future loans. This is probably the biggest hangup the banks are having right now.

That's a very brief summary, but it might give you all some idea of how the process works.