First I am not a 'professional" in anything involving finance and markets. Let's get that clear at the outset. I was a low level engineer in my working career. But I can and do read and think. The knowledge I have of how things financial work... is a work in progress.

Tyhee will make a deal with bankers that will say in effect, "If you will loan us $300M we will pay you back at the rate of $100M per year for 3 years with interest by selling to you our gold production at the price of $XXX (usually a figure $100 to $200 below market at the time the deal is struck. Right there exists a substantial amount of profit lost to shareholders. The larger the loan the more is lost. However something must be done to move forward into production. That is why the "start slow and build from internal financing" is better in the long run.

Additionally, bankers want protection from the unforeseeable. They will require a put option be held throughout the duration of the contract; their financial arm takes the profits on that. Its purpose will be to protect the bank in the event the price of gold falls. Tyhee will be required to purchase and maintain a "put" that will ensure that if the price of gold goes down Tyhee will make enough on the option so that they can continue to make their payments. This too, in effect comes out of the shareholders pockets, because maintaining that put costs money which will be scarce in the earliest periods of production and may cause additional share dilution every time there is a need for capital in the ongoing operations. I don't expect Tyhee to be profitable from day one. The amount of money spent on the put, while a necessary part of the transaction, is money thrown away.

This is the part of the story everyone knows and just accepts for the most part. But there's more loss and more danger in dealing with the bankers.

Three hundred-sixty thousand ounces or more of the earliest production efforts will be sold for (at a guess) $800 per ounce to the bankers when the price of gold may well soon move to $1500, $2000, or more per ounce. If we take the figure of $2000 and multiply it by 360,000 oz., Tyhee will be paying back the equivalent of approximately 720 million dollars plus the money spent on the put and any additional dilution.

The point is that locking in a price below current market for a fair amount of production can cost shareholders a great deal of money. Now I know this isn't a calculation that will ever show up on a balance sheet but I believe the balance sheet with the foregoing assumption for shareholders would be affected by ($720M/the share count) or approximately $3 per share.

Neither is this the end of it. Who manipulates the gold market if you are among those who believe it is manipulated?

Is it not the very bankers who want to loan Tyhee the money to get started in production as their slaves. Those very bankers will take whatever money is given them and use it to hold down the price of gold and the share price of the company so that they will have to come back to them again and again and again. This is exactly what has held this market down for these many years. Gold should be over $2000/oz. already and Tyhee would long ago have ceased being a penny stock. Governments that deal in "paper currency" do not want the gold price to show the weakness of their "money." They therefore turn a blind eye to what the bankers are doing if they don't go further and openly encourage, aid, and abet them. The miners wind up as slaves and the shareholders make a pittance compared to what should have been made.

One could, on the corporate level, make a bet that the price of gold would go up substantially and purchase long term call options (leaps) on the price of gold. It could and would cover the losses listed above if it were large enough. But to do so as Dr. Webb pointed out is speculative. We all believe the gold price is going higher, the fundamentals of the market demand it; but the opposition to a rise in the gold price is very formidable and determined. And they have a lot of power.

For these reasons starting slow and financing with self generated profits is my first choice.

Joint venturing with a contract that allows the current management to run the production end of the business is another option. If chosen, Tyhee must absolutely makes certain that they cannot become saddled with any of the obligations of its senior partner (that's another trap of which Sinclair has warned). Basically it would be a financing deal with a more friendly partner than your average banker. At least they wouldn't be taking your money and using it to destroy your stock price. They would have an interest in seeing you do well rather than badly.

So those are some of thoughts on the matter and my understanding (right or wrong) of how the process fleshes out.

The final paragraphs deal with a related matter. If all miners would do this the bankers would have a much rougher go of their opposition to gold prices. Don't get me wrong, bankers don't hate gold; they want to end up owning all of it personally (i.e. outside the corporation) they work through. The day when the physical metal to back the paper schemes of the bankers is revealed to be non-existent (in the corporation) would come much sooner if the miners had faith in what they are doing.

All mining operations that are forced to finance during a low point in the metals market should take the paper money and purchase the physical metal with the proceeds of the finance and sell it off as needed for operations. This would probably result in considerable + interest during the period where the money was held for future use and it would help fight those trying to wreck the price of their product. When the money is deposited in the bank; the bank will take the money you borrowed, are paying interest on, have redeposited, and use it to wreck your business if they can. Banks love making loans and the more they wreck your business, the more you will be back at the begging bowl.

Read Ecclesiastes 1:15 and you will understand why God will soon destroy this "world." Not the earth itself; but he will most certainly remove the wicked from it.

My apologies if I had to use curse words to make my point. I had to mention "banks" and "bankers" a number of times.

P.