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Welcome to the major leagues of debt. Collateralized debt obligations, almost always referred to as a CDOs, are horrendously
complicated deals that often leave anyone without a MBA wondering what was put into these CDOs.
The first thing to
understand about bonds, (aka debt) is that bonds are often backed by something else. Think about your home mortgage. If you
don't pay your mortgage, the bank can take the house. You end up homeless, and the bank sells the house to pay off the rest
of that mortgage. There is something "backing" that mortgage; something lender can fall back on, if you don't pay your bills
like a good human being. That's called collateral.
CDOs are one flavor of an entire sector of investing called structured
finance, and they are also backed. CDOs, in the simplest concept, are just bonds backed by something else. In most cases,
a CDO is backed by a collection of various types of debt. CDOs can be home mortgages, or other types of debt like credit cards,
auto loans, and personal loans. Most of these types of debt are usually considered a bit more risky and they don't have the
backing that a home loan does. So, if you think it through, you can imagine that CDOs are usually considered a risky investment.
To take a step further, understand that CDOs have multiple flavors within each CDO. These flavors are called tranches. If you've taken French, you might recognize the word, it means "slice" or "portion." Each slice of that CDO you invest in is a little different and carries different amounts of risk.
You could invest in the lowest risk tranche of the CDO, which would
provide you lower risk. But, you don't get a good return on that investment. Or, you can be the heroic adventurer of bonds
and invest in the lowest-grade tranche of the CDO. You'll make an amazing return, but if the economy even looks at you wrong,
you might lose the entire investment.
CDOs aren¿t easy, and are almost always invested in by mutual funds, insurance
companies and hedge funds. As an individual investor, you will probably not come across a CDO you can participate in.
Home / Markets / Industries / Industrials
Thursday, June 26, 2008
Coronation Minerals Inc./Guyana Goldfields Inc.: Acquisition of Remaining 50% of Coppermine River Project
Comtex
TORONTO, ONTARIO, Jun 26, 2008 (MARKET WIRE via COMTEX) ----Coronation Minerals Inc. (TSX VENTURE: CMV) ("Coronation") and Guyana Goldfields Inc. (TSX: GUY) ("Guyana") are pleased to announce that they have entered into an agreement which allows for Coronation to acquire the remaining 50% interest of the Coppermine River Project (the "Coppermine Agreement"). Coronation had originally acquired its initial 50% in the Coppermine River Project in 2002. Terms of the Coppermine Agreement call for Coronation to issue 5,000,000 common shares to Guyana. Guyana will also retain a 1.5% net smelter return royalty over the unpatented claims only, and a right of first refusal to participate in future financings of Coronation.
Guyana currently holds approximately 14% of the issued and outstanding common shares of Coronation, and 3 directors act on both the Boards of Coronation and Guyana. In addition, J. Patrick Sheridan is the President and Chief Executive Officer of both companies. As a result, Guyana is a related party of Coronation, and the agreement for Coronation to acquire the remaining 50% of the Coppermine River Project from Guyana constitutes a related party transaction under Multilateral Instrument 61-101 "Protection of Minority Security Holders in Special Transactions" ("MI 61-101"). Upon completion of the Coppermine Agreement, Guyana will hold or control approximately 19.8% of the issued and outstanding shares of Coronation.
There has been no prior valuation in respect of the Coppermine Agreement. The Coppermine Agreement is not subject to the formal valuation requirements of MI 61-101 by virtue of subsection 5.5(a) and is also exempt from minority shareholder approval requirements by virtue of subsection 5.7(1)(a), as at the relevant time neither the fair market value of the assets being acquired nor the fair market value of the consideration being paid under the Coppermine Agreement will exceed 25% of Coronation's market capitalization as calculated in compliance with MI 61-101.
About Coronation Minerals Inc.
Coronation Minerals Inc. is a Canadian based exploration and development company. The Company presently controls and holds both the Wellgreen Property, Yukon Territory and the Coppermine River Project, Nunavut Territory. Both of these projects are described as Copper-Nickel-Platinum-Palladium prospects.
About Guyana Goldfields Inc.
Guyana Goldfields Inc. is a Canadian based mineral exploration company primarily focused on the exploration and development of gold deposits in the Guiana Shield of South America. The Guiana Shield is in the northern part of the Amazon Craton and covers parts of Guyana, Venezuela, Suriname, French Guyana and northern Brazil.
Guyana holds advanced exploration projects in various stages of development and has been operating in Guyana continuously since 1996.
Additional Information
Information is available on Guyana's website at www.guygold.com and on www.sedar.com.
The TSX and TSX Venture have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
Contacts: Guyana Goldfields Inc. J. Patrick Sheridan President and Chief Executive Officer (416) 628-5936 (416) 628-5935 (FAX) Email: psheridan@guygold.com Website: www.guygold.com
SOURCE: Guyana Goldfields Inc. and Coronation Minerals Inc.
mailto:psheridan@guygold.com http://www.guygold.com
Copyright 2008 Market Wire, All rights reserved.
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