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As more seniors rely on reverse mortgages, troubles beckon for heirs

A new government report shows many seniors are taking out reverse mortgages on their homes without fully understanding the ramifications, leading to foreclosures among borrowers and a tangle of problems for heirs after the borrower dies.

“Consumer complaints tell us that the complex terms of reverse mortgages continue to be misunderstood,” said Richard Cordray, director of the Consumer Financial Protection Bureau, which just released a report highlighting the top complaints the agency received about reverse mortgages over the last three years.

A reverse mortgage is a type of loan that allows homeowners age 62 and older to tap a portion of the equity in their homes. The money typically is paid out in a lump sum or in regular fixed payments, with fees and interest added to the balance each month. Unlike a home equity loan, the money does not have to be repaid until the borrower dies, moves out or sells the home.

The loans can be a life line for house-rich, cash-poor seniors struggling with daily living expenses. Reverse mortgages also have been used to help retirees improve their lifestyles, allowing them to buy the summer home they had always dreamed about, for example.

But problems and confusion are expected to continue as more baby boomers retiring with little or no savings turn to the loans for help getting by.

The Consumer Financial Protection Bureau cited a 2010 Federal Reserve report concluding that in the 55-to-64 age group, 41 percent had no retirement savings. Even among those who had a nest egg, the average balance was only $103,200, the report said.

Many complaints that the protection bureau received showed people were confused about the way reverse mortgages work.

“Many consumers struggle with understanding how quickly their loan balance will go up and their home equity will fall,” the report said. As a result, many borrowers who wanted to refinance their loans were frustrated because there wasn’t enough remaining equity in their homes.

One of the most common types of complaints involved the inability of a borrower’s family members to assume the loan in order to keep the house when the borrower died, according to the report.

Reverse mortgages prohibit loan assumptions because actuarial tables are used to help determine the loan amounts. Adult children may keep the home only by paying off the loan or by paying 95 percent of the current appraised value of the house.

Those rules can present problems for multigenerational households when family members are living in the home at the time of the borrower’s death.

Heirs also complained about what they believed were inflated appraisals that required them to pay more than they expected, the report said.

Another common complaint involved the shock of having to sell a home or face foreclosure when a spouse died because the surviving spouse’s name was not on the reverse mortgage. Some couples were advised to take a reverse mortgage in the older spouse’s name to qualify for a bigger loan.

“Some consumers report that their loan originator falsely assured them they would be able to add the other spouse to the loan at a later date,” the report said.

To help more seniors stay in their homes, the U.S. Department of Housing and Urban Development — which insures most reverse mortgages through its Home Equity Conversion Mortgage program — implemented a new rule allowing surviving spouses who meet certain conditions to remain in the home regardless of their borrowing status.

The rule only applies to reverse mortgages originated through HUD’s program after Aug. 4, 2014.

The financial protection bureau also reported a number of complaints from borrowers who faced foreclosure or who lost their homes because they did not keep up with payments for property taxes and homeowners’ insurance, which under terms of a reverse mortgage must be kept current.

“Some consumers describe unsuccessful attempts to halt foreclosure proceedings by paying overdue taxes in full or through payment plans,” the report said.

In an effort to stem such defaults, lenders making loans under HUD’s program after March 2 will be required to make certain financial assessments of a prospective borrower. Currently, loan qualifications primarily are a borrower’s age and the amount of equity in a home.

The financial protection bureau recommends three steps that homeowners with reverse mortgages should take to protect their heirs. The advisory, “Three Steps You Should Take If You Have a Reverse Mortgage,” is available at consumerfinance.gov/blog.

The steps involve verifying who is on the loan, and planning ahead for the non-borrowing spouse and for any family members living in the home.

The advisory also has links to a consumer guide for people considering a reverse mortgage and a question-and-answer tutorial.

Consumers can submit a complaint to the protection bureau at ConsumerFinance.gov, or by calling toll-free 1-855-411-2372.

Patricia Sabatini: psabatini@post-gazette.com or 412-263-3066.

[…]

Teranga Gold Announces Record Free Cash Flow for 2014

TORONTO, ONTARIO–(Marketwired – Feb 18, 2015) – Teranga Gold Corporation (“Teranga” or the “Company”) (TGZ.TO)(TGZ.AX) is pleased to report its financial results for the fourth quarter and full year ended December 31, 2014. All financial information is in US dollars unless otherwise noted.

“During 2014 we made significant progress in executing against our key objectives, namely to maximize free cash flow and profitability, to strengthen our balance sheet and to grow organically,” stated Richard Young, President and Chief Executive Officer of Teranga. “With the significant improvement in our costs and efficiencies, we generated free cash flow of $189 per ounce, which is in line with the top senior gold companies.”

“Just as importantly, our balance sheet strengthened significantly over the last 12 months,” stated Navin Dyal, Vice President and Chief Financial Officer of Teranga. “As of today we are now debt-free, a stand-out achievement in our sector particularly given the declining gold price environment.”

Added Mr. Young, “Last year was a successful one for Teranga and 2015 is starting off on an equally positive note. Roadwork has begun on our new high-grade Gora deposit and we are focused on having this new mine up and running by the fourth quarter. With 6.1 million ounces of measured and indicated gold resources, together with the growth opportunities we see from our large mine license and regional land package, we believe we are just scratching the surface of our potential.”

Key Highlights

Three months ended December 31 Year ended December 31 2014 2013 Change 2014 2013 Change Revenue 76,553 58,302 31 % 260,588 297,927 (13 %) Profit (loss) attributable to shareholders of Teranga 27,693 (2,420 ) n/a 17,776 50,280 (65 %) Per share 0.08 (0.01 ) n/a 0.05 0.19 (72 %) Operating cash flow 30,677 13,137 134 % 49,009 74,307 (34 %) Free cash flow1 26,572 20,412 30 % 39,096 16,251 141 % Gold production (ounces)2 71,278 52,368 36 % 211,823 207,204 2 % Total cash costs per ounce sold3 598 711 (16 %) 710 641 11 % All-in sustaining costs per ounce sold3 711 850 (16 %) 865 1,033 (16 %)

For a full explanation of Financial, Operating, Exploration and Development results please see the Audited Consolidated Financial Statements and Management’s Discussion & Analysis for 2014 at www.terangagold.com.

Consolidated profit attributable to shareholders increased to $27.7 million ($0.08 per share) for the fourth quarter, while full year profit attributable to shareholders totaled $17.8 million ($0.05 per share) Free cash flow increased to $26.6 million for the fourth quarter and $39.1 million for the full year The Company is now debt free having retired the outstanding balance of its loan facility on December 31, 2014 and fully repaid the outstanding balance of its finance facility subsequent to year-end Construction began on the high-grade Gora satellite deposit on February 14th – production expected in the fourth quarter The Company expects to generate positive free cash flow in 2015 based on 2015 production in the range of 200,000 to 230,000 ounces(2) at total cash costs of $650 to $700 per ounce3 and all-in sustaining costs (including all new project development costs) of $900 to $975 per ounce3

1Free cash flow is defined as operating cash flow (excluding one-time transaction costs related to the acquisition of the OJVG) less capital expenditures.

2This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence and OJVG mining license as disclosed in Table 2 on page 8 of this Report. The estimated ore reserves underpinning this production guidance have been prepared by a competent person in accordance with the requirements of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Please refer to the Competent Persons Statement on pages 22-23 of this Report.

3Total cash costs per ounce and all-in sustaining costs per ounce of gold sold are non-IFRS measures which do not have standard meanings under IFRS. Please refer to Non-IFRS Performance Measures at the end of this Report.

Review of Financial Results

(US$000’s, except where indicated) Three months ended December 31 Year ended December 31 Financial Data 2014 2013 2014 2013 2012 Revenue 76,553 58,302 260,588 297,927 350,520 Profit (loss) attributable to shareholders of Teranga1 27,693 (2,420 ) 17,776 50,280 93,655 Per share1 0.08 (0.01 ) 0.05 0.19 0.38 Operating cash flow 30,677 13,137 49,009 74,307 104,982 Capital expenditures 4,105 3,725 18,913 69,056 115,785 Free cash flow2 26,572 20,412 39,096 16,251 (10,803 ) Cash and cash equivalents (including bullion receivables and restricted cash) 35,810 42,301 44,974 Net cash (debt)3 31,864 (32,068 ) (75,182 ) Total assets1 726,323 628,643 565,715 Total non-current liabilities 128,112 29,241 68,505 Note: Results include the consolidation of 100% of the OJVG’s operating results, cash flows and net assets from January 15, 2014. 1 The Company has reassessed the accounting for deferred stripping assets to include amortization of equipment directly related to deferred stripping activity. The impact of this adjustment has been applied retrospectively from January 1, 2012. 2 Free cash flow is defined as operating cash flow (excluding one-time transaction costs related to the acquisition of the OJVG) less capital expenditures. 3 Net cash (debt) is defined as total borrowings and financial derivative liabilities less cash and cash equivalents, bullion receivables and restricted cash.

Review of Operating Results

Three months ended December 31 Year ended December 31 Operating Results 2014 2013 2014 2013 Ore mined (‘000t ) 2,666 1,993 6,174 4,540 Waste mined – operating (‘000t ) 5,594 6,655 21,178 15,172 Waste mined – capitalized (‘000t ) 490 420 1,969 15,066 Total mined (‘000t ) 8,750 9,068 29,321 34,778 Grade mined (g/t ) 1.47 1.61 1.54 1.62 Ounces mined (oz ) 126,334 103,340 305,192 236,718 Strip ratio waste/ore 2.3 3.6 3.7 6.7 Ore milled (‘000t ) 1,009 860 3,622 3,152 Head grade (g/t ) 2.44 2.11 2.03 2.24 Recovery rate % 90.1 89.7 89.7 91.4 Gold produced1 (oz ) 71,278 52,368 211,823 207,204 Gold sold (oz ) 63,711 46,561 206,336 208,406 Average realized price $/oz 1,199 1,249 1,259 1,246 Total cash cost (incl. royalties)2 $/oz sold 598 711 710 641 All-in sustaining costs2 $/oz sold 711 850 865 1,033 Mining ($/t mined ) 2.58 2.65 2.83 2.59 Milling ($/t milled ) 13.91 17.96 17.15 20.15 G&A ($/t milled ) 4.27 4.84 4.61 5.38 1 Gold produced represents change in gold in circuit inventory plus gold recovered during the period. 2 Total cash costs per ounce and all-in sustaining costs per ounce are prior to non-cash inventory write-downs to net realizable value and are non-IFRS financial measures that do not have a standard meaning under IFRS. Please refer to Non-IFRS Performance Measures at the end of this report. Three months ended December 31, 2014 Masato Sabodala Total Ore mined (‘000t) 1,788 878 2,666 Waste mined – operating (‘000t) 3,789 1,805 5,594 Waste mined – capitalized (‘000t) 490 – 490 Total mined (‘000t) 6,067 2,683 8,750 Grade mined (g/t) 1.28 1.86 1.47 Ounces mined (oz) 73,875 52,459 126,334 Year ended December 31, 2014 Masato Sabodala Total Ore mined (‘000t) 2,003 4,171 6,174 Waste mined – operating (‘000t) 4,392 16,786 21,178 Waste mined – capitalized (‘000t) 490 1,479 1,969 Total mined (‘000t) 6,885 22,436 29,321 Grade mined (g/t) 1.27 1.66 1.54 Ounces mined (oz) 82,017 223,175 305,192

Review of Cost of Sales

(US$000’s) Three months ended December 31 Year ended December 31 Cost of Sales 2014 2013 2014 2013 Mine production costs – gross 41,123 43,555 162,410 170,752 Capitalized deferred stripping (1,266 ) (1,444 ) (5,976 ) (43,264 ) Capitalized deferred stripping – non-cash1 189 137 (658 ) (4,124 ) 40,046 42,248 155,776 123,364 Depreciation and amortization – deferred stripping assets1 7,205 12,639 28,911 17,850 Depreciation and amortization – property, plant & equipment and mine development expenditures 11,988 15,263 40,605 60,683 Royalties 3,843 2,890 12,486 14,755 Advanced royalty payment 391 – 440 – Rehabilitation – – – 6 Inventory movements (5,802 ) (11,945 ) (22,145 ) (8,552 ) Inventory movements – non-cash1 (3,907 ) (12,569 ) (8,089 ) (14,672 ) (9,709 ) (24,514 ) (30,234 ) (23,224 ) Total cost of sales before adjustments to net realizable value 53,764 48,526 207,984 193,434 Adjustments to net realizable value1 (10,865 ) – – – Adjustments to net realizable value – depreciation1 (5,161 ) – – – (16,026 ) – – – Total cost of sales 37,738 48,526 207,984 193,434 1 The Company has reassessed the accounting for deferred stripping assets to include amortization of equipment directly related to deferred stripping activity. The impact of this adjustment has been applied retrospectively from January 1, 2012.

DECEMBER QUARTER FINANCIAL HIGHLIGHTS

Gold revenue for the three months ended December 31, 2014 was $76.6 million compared to gold revenue of $58.3 million for the same prior year period. The increase in gold revenue was due to 37 percent higher gold sales volume, partially offset by 4 percent lower realized gold prices during the fourth quarter of 2014. During the fourth quarter of 2014, 63,711 ounces were sold at an average realized gold price of $1,199 per ounce. During the fourth quarter of 2013, 46,561 ounces were sold at an average realized price of $1,249 per ounce. Consolidated profit for the three months ended December 31, 2014 was $27.7 million ($0.08 per share), compared to a loss of $2.4 million ($0.01 loss per share) in the same prior year period. The increases in profit and earnings per share over the prior year quarter were primarily due to higher revenues in the current year quarter, and a reversal of non-cash inventory write-down to net realizable value (“NRV”) totaling $16.0 million recorded in the second and third quarters of 2014. During the three months ended December 31, 2014, the Company recorded a $16.0 million reversal of the non-cash write-down on long-term low-grade ore stockpile inventory that had been previously recorded during the second and third quarters of 2014. The non-cash write down was adjusted for the impact of a change in the accounting for deferred stripping costs made during the fourth quarter. Higher ore grades and ounces mined during the fourth quarter resulted in a decrease in the per ounce ending cost of low-grade ore stockpiles (including applicable overhead, depreciation and amortization). Operating cash flow for the three months ended December 31, 2014 provided cash of $30.7 million compared to $13.1 million cash provided in the prior year. The increase in cash flow provided by operations compared to the prior year quarter was primarily due to higher gold sales. Capital expenditures of $4.1 million for the three months ended December 31, 2014 were similar to capital expenditures recorded in the same prior year period.

DECEMBER QUARTER OPERATIONAL HIGHLIGHTS

Gold production during the fourth quarter of 2014 of 71,278 ounces increased by 47 percent and 36 percent versus the third quarter of 2014 and the fourth quarter of 2013, respectively. Production was higher in the last three months of 2014 due to higher processed grade and improved mill throughput. Production was slightly lower than fourth quarter guidance primarily due to marginally lower recovery rates than planned. Total cash costs for the three months ended December 31, 2014 totalled $598 per ounce sold, 16 percent lower than the same prior year period. Lower total cash costs per ounce in the current year, excluding the reversal of non-cash inventory write-downs to NRV, were mainly due to lower mining and processing costs and higher gold production in the current year quarter. All-in sustaining costs for the three months ended December 31, 2014 were $711 per ounce sold compared to $850 per ounce sold in the same prior year period. All-in sustaining costs for the current year, excluding the reversal of non-cash inventory write-downs to NRV, were lower due to a decline in total cash costs and lower capital expenditures. Total tonnes mined for the three months ended December 31, 2014 were 4 percent lower year-over-year. Mining activities in the current period were mainly focused on the upper benches of Masato and the lower benches of phase 3 of the Sabodala pit, while in the same prior year period, mining was focused on the upper benches of phase 3 of the Sabodala pit which resulted in shorter ore and waste haul distances. Access to the lowest benches of phase 3 of the Sabodala pit, which was originally scheduled for mining during the fourth quarter 2014, have been deferred into 2015 due to bench access constraints. In total, approximately 10,300 high-grade ounces (91,000 tonnes at over 3.5 gpt) originally part of the 2014 mine plan are expected to be mined and processed during first and second quarters of 2015. As a result of this deferral, gold production in 2014 was impacted by about an approximately net 8,000 ounces for the year as this high-grade material was displaced by low-grade feed to the mill. Total mining costs for the three months ended December 31, 2014 were 6 percent lower than the same prior year period mainly due to lower material movement and higher productivity at Masato due to mining softer material. Unit mining costs for the three months ended December 31, 2014 were $2.58 per tonne, a decrease of 3 percent compared to the same prior year period. Ore tonnes milled for the three months ended December 31, 2014 were 17 percent higher than the same prior year period. The Company set a quarterly record for total tonnes milled during the fourth quarter of 2014. As anticipated, the introduction of softer oxide ore from Masato has had a positive impact on crushing and milling rates. In the same prior year period, mill feed was sourced from phase 3 of the Sabodala pit containing harder ore. Processed grade for the three months ended December 31, 2014 was 16 percent higher than the same prior year period. Mill feed during the fourth quarter 2014 included significant high grade ore that was sourced from the upper benches of Masato and the lower benches of the Sabodala pit. In the prior year period, mill feed was sourced from phase 3 of the Sabodala pit at grades closer to average reserve grade. Total processing costs for the three months ended December 31, 2014 were 9 percent lower than the same prior year period, mainly due to timing of maintenance activities and lower consumption of grinding media with the softer ore from Masato. Unit processing costs for the three months ended December 31, 2014 were 23 percent lower than the prior year period due to lower total processing costs and higher tonnes milled. Total mine site general and administrative costs for the three months ended December 31, 2014 were 1 percent lower than the prior year period mainly due to lower insurance premiums. Unit general and administration costs for the three months ended December 31, 2014 were 12 percent lower than the prior year period due to lower general and administrative costs and higher tonnes milled.

FULL YEAR FINANCIAL HIGHLIGHTS

Gold revenue for the twelve months ended December 31, 2014 was $260.6 million compared to gold revenue of $297.9 million for the same prior year period. The decrease in gold revenue was mainly due to lower spot gold prices in the current year. Consolidated profit for the twelve months ended December 31, 2014 was $17.8 million ($0.05 per share), compared to profit of $50.3 million ($0.19 per share) in the same prior year period. The decrease in profit in the current year was primarily due to lower revenue, higher cost of sales, partially offset by lower transaction costs related to the acquisition of the OJVG. For the year ended December 31, 2014, operating cash provided $49.0 million compared to $74.3 million in the prior year. The decrease was primarily due to lower revenues, including the impact of delivering a portion of current period production to Franco-Nevada at 20 percent of gold spot prices. For the year ended December 31, 2013, operating cash flow included a use of cash to buy-back-back the remaining “out of the money” gold forward sales contracts and the delivery of 45,289 ounces into the hedge book at $806 per ounce. Capital expenditures were $18.9 million for the twelve months ended December 31, 2014, compared to $69.1 million in the same prior year period. The decrease was due to lower sustaining and development capital expenditures and lower capitalized deferred stripping costs in the current year.

FULL YEAR OPERATIONAL HIGHLIGHTS

Gold production for the year increased marginally from the year earlier to 211,823 ounces and was the second highest production total in Company history. However, production fell short of the revised guidance estimate of 215,000 ounces primarily due to lower than planned recovery rates in the fourth quarter. Total cash costs per ounce for the year ended December 31, 2014 of $710 per ounce were marginally above the higher end of guidance of $650 to $700 per ounce. This compares to $641 per ounce in 2013. The increase in total cash costs was mainly due to lower capitalized deferred stripping, partly offset by lower mining and processing costs compared to the prior year. All-in sustaining costs per ounce for the year ended December 31, 2014 were $865 per ounce, within the original guidance range of $800 to $875 per ounce and 16 percent lower than the prior year. Lower all-in sustaining costs were mainly due to lower capital expenditures in the current year period. Total tonnes mined for the year ended December 31, 2014 were 16 percent lower compared to the same prior year period. Mining activities in the current year were initially focused on the lower benches of phase 3 of the Sabodala pit. Commencing in September, mining began on schedule at Masato, the first of the OJVG deposits to be developed. Total tonnes mined in 2014 were about 4 million tonnes higher than the original plan, mainly due to a redesign of phase 3 of the Sabodala pit as a result of mining in a peripheral area to the ore body which added 1.3 million waste tonnes that was originally scheduled for mining in phase 4 of the Sabodala pit in 2016; combined with higher tonnes mined at Masato due to better grade and ore tonnes than originally expected. In the prior year, mining activities were mainly focused on the upper benches of phase 3 of the Sabodala pit. Total mining costs for the year ended December 31, 2014 were 8 percent lower than the same prior year period due to decreased material movement. However, unit mining costs for the year ended December 31, 2014 were 9 percent higher than the same prior year period due to fewer tonnes mined. In 2014, mining was mainly concentrated on the lower benches of phase 3 of the Sabodala mine pit with limited space resulting in lower productivity and higher costs, which was partially offset by higher productivity at Masato from mining softer material. Ore tonnes milled for the twelve months ended December 31, 2014 were 15 percent higher than the same prior year period. As anticipated, the introduction of softer oxide ore from Masato has had a positive impact on crushing and milling rates. In the same prior year period, mill feed was sourced from phase 3 of the Sabodala pit containing harder ore. Processed grade for the year ended December 31, 2014 was 9 percent lower than the same prior year period, as mill feed for the first nine months of 2014 was sourced from ore from phase 3 of the Sabodala pit at grades closer to average reserve grade. In the prior year, mill feed was primarily sourced from phase 3 of the Sabodala pit at higher grades. Total processing costs for the twelve months ended December 31, 2014 were 2 percent lower than the same prior year period, mainly due to timing of maintenance activities and lower consumption of grinding media with the softer ore from Masato. Unit processing costs for the twelve months ended December 31, 2014 were 15 percent lower than the prior year period due to lower total processing costs and higher tonnes milled. Total mine site general and administrative costs for the twelve months ended December 31, 2014 were 5 percent lower than the prior year period mainly due to lower insurance premiums. Unit general and administration costs for the twelve months ended December 31, 2014 were 14 percent lower than the prior year period due to lower general and administrative costs and higher tonnes milled.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash position at December 31, 2014 was $35.8 million. For 2014, the Company had identified approximately $80.0 million in one-time payments, including the retirement of $42.8 million of $47.0 million combined balance outstanding under the Loan Facility and the Equipment Facility, $8.0 million in advance dividends, $9.0 million in remaining legal and office closure costs related to the acquisition of the OJVG, $7.5 million to acquire Badr’s share of the OJVG and $15.0 million in government payments. For the year ended December 31, 2014, the Company has made a total of $63.0 million in one-time payments. This includes $42.8 million in debt repayments (including the final payment for the $60.0 million Macquarie Loan Facility), $3.7 million in payments to the Republic of Senegal and one-time payments related to the acquisition of the OJVG, including $9.0 million for transaction, legal and office closure costs and $7.5 million to acquire Badr’s share of the OJVG. Approximately $23.0 million in one-time payments to the Republic of Senegal, are now expected to be paid over 2015 and 2016. The one-time payments described herein, excludes $30.0 million in debt retired in the first quarter 2014 as part of the Franco-Nevada transaction. Subsequent to the year ended December 31, 2014, the Company fully repaid the outstanding balance of its finance facility with Macquarie Bank Limited (“Equipment Facility”), resulting in the Company being debt free. Notwithstanding, the Company is working to put a standby facility in place to provide additional financial flexibility to ensure sufficient liquidity is maintained by the Company.

ADDITIONAL MATTERS

In order to allow non-executive directors and employees to participate in the long-term success of the Company and to promote alignment of interests between directors/employees and shareholders, the Company introduced a new Deferred Share Unit Plan (“DSU Plan”) for non-executive directors and a new Restricted Share Unit Plan (“RSU Plan”) for employees during the second quarter 2014. DSUs represent a right for a non-executive director to receive an amount of cash (subject to withholdings), on ceasing to be a director of the Company, equal to the product of (i) the number of DSUs held, and (ii) the volume weighted average trading price of the Company’s shares for the five trading days prior to such date. For employees, RSUs are not convertible into Company stock and simply represent a right to receive an amount of cash (subject to withholdings), on vesting, equal to the product of i) the number of RSUs held, and ii) the volume weighted average trading price of the Company’s shares for the five trading days prior to such date. RSUs will generally vest as to 50 percent in thirds over a three year period and as to the other 50 percent, in thirds based on the Company’s achievement of performance-based criteria. During the twelve months ended December 31, 2014, the Company granted 2,343,487 RSUs at a price of C$0.72 per unit. At December 31, 2014 there were no units vested, 436,532 units were forfeited and 298,884 units were cancelled. The Company granted 545,000 DSUs during the twelve months ended December 31, 2014 at a price of C$0.72 per unit. At December 31, 2014 there were no units vested and no units were cancelled. In January 2015, SGO received a tax assessment from the Senegalese tax authorities claiming withholding tax on interest paid to an offshore bank of approximately $3.0 million. The Company believes that the amount in dispute is without merit and that the issue will be resolved with no or an immaterial amount of tax due. Approximately $18.0 million of the SGO 2011 tax assessment of approximately $24.0 million has been resolved and approximately $6.0 million remains in dispute. We believe that the remaining amount in dispute is without merit and that these issues will be resolved with no or an immaterial amount of tax due. OUTLOOK 2015 Year ended December 31 2014 Actuals 2015 Guidance Range Operating Results Ore mined (‘000t ) 6,174 6,500 – 7,500 Waste mined – operating (‘000t ) 21,178 ~19,500 Waste mined – capitalized (‘000t ) 1,969 2,500 – 3,500 Total mined (‘000t ) 29,321 28,500 – 30,500 Grade mined (g/t ) 1.54 1.40 – 1.60 Strip ratio (waste/ore ) 3.7 3.00 – 3.50 Ore milled (‘000t ) 3,622 3,600 – 3,800 Head grade (g/t ) 2.03 2.00 – 2.20 Recovery rate % 89.7 90.0 – 91.0 Gold produced1 (oz ) 211,823 200,000 – 230,000 Total cash cost (incl. royalties)2 $/oz sold 710 650 – 700 All-in sustaining costs2,3 $/oz sold 865 900 – 975 Total depreciation and amortization2 $/oz sold 298 260 – 275 Mining ($/t mined ) 2.83 2.75 – 2.90 Mining long haul (cost/t hauled) ($/t milled ) – 5.00 – 6.00 Milling ($/t milled ) 17.15 15.50 – 17.50 G&A ($/t milled ) 4.61 5.25 – 5.75 Gold sold to Franco-Nevada1 (oz ) 20,625 24,375 Exploration and evaluation expense (Regional Land Package) ($ millions ) 2.8 1.0 – 2.0 Administration expenses and Social community costs (excluding depreciation) ($ millions ) 14.8 15.0 – 16.0 Mine production costs ($ millions ) 162.4 155.0 – 165.0 Capitalized deferred stripping ($ millions ) 6.0 8.0 – 10.0 Net mine production costs ($ millions ) 156.4 147.0 – 155.0 Capital expenditures Mine site sustaining ($ millions ) 5.0 6.0 – 8.0 Capitalized reserve development (Mine License) ($ millions ) 4.0 6.0 – 8.0 Project development costs (Gora/Kerekounda) Mill optimization ($ millions ) – 5.0 – 6.0 Development ($ millions ) 3.9 16.5 – 17.5 Mobile equipment and other ($ millions ) – 7.5 – 8.5 Total project development costs ($ millions ) 3.9 29.0 – 32.0 Capitalized deferred stripping ($ millions ) 6.0 8.0 – 10.0 Total capital expenditures ($ millions ) 18.9 49.0 – 58.0 1 22,500 ounces of production are to be sold to Franco Nevada at 20% of the spot gold price. Due to the timing of shipment schedules near year end, the delivery of 1,875 ounces of gold for the month of December was not received by Franco-Nevada until early January 2015. The transaction with Franco-Nevada permits for the delivery of payable gold for up to five business days following a month end. 2 Total cash costs per ounce, all-in sustaining costs per ounce and total depreciation and amortization per ounce are non-IFRS financial measures and do not have a standard meaning under IFRS. Please refer to Non-IFRS Performance Measures at the end of this report. 3 All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense and social community costs not related to current operations), capitalized deferred stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council. Key assumptions: Gold spot price/ounce – US$1,200, Light fuel oil – US$0.95/litre, Heavy fuel oil – US$0.76/litre, US/Euro exchange rate – $1.20, USD/CAD exchange rate – $0.85. Other important assumptions include: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and recoveries will remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production. The Company’s mine plans are designed to maximize free cash flow. In 2015, the Company expects to generate free cash flow at $1,200 per ounce gold after funding its organic growth initiatives. Mining activity in 2015 will continue in the Masato pit, as well as completing phase 3 of the Sabodala pit. Development of Gora is expected to be complete during the third quarter, with mining expected by late in the third quarter and production from Gora commencing in the fourth quarter of the year. The Company expects to produce between 200,000 and 230,000 ounces of gold in 2015. The quarterly production profile in 2015 is expected to look similar to the 2014 quarterly production profile with higher production in the fourth quarter once Gora ore is processed through the mill. In total, the second half of 2015 is expected to account for approximately 55 percent of total gold production as Gora comes into production. The Gora development schedule is aggressive but Management believes it is achievable. The delay in the Gora permitting process has delayed road construction which was to start at the beginning of the year but began on February 14th. The delay in the start date of road construction may negatively impact the timing of commencement of mining at Gora resulting in production at the lower end of our 2015 production guidance range. The final phase in the ESIA process, a public hearing to announce the outcome of the technical and public enquiry processes occurred on February 18th. Environmental approval and the occupational haul road permit are now expected in the ordinary course and are not expected to impact a fourth quarter production commencement for the Gora deposit. The Company’s tax exempt status ends on May 2, 2015. From this point forward, the Company will be subject to a 25 percent income tax rate as well as customs duties and non-refundable value-added tax on certain expenditures. Any income tax incurred in 2015 will not be paid until 2016 and the other taxes are built into our unit cost guidance. Total mine production costs for 2015 are expected to fall in the range of $147.0 to $155.0 million, similar to 2014 (net of capitalized deferred stripping). The increase in taxes and duties for consumables of about $5.5 million is expected to be offset by the decline in costs for light fuel oil (“LFO”), heavy fuel oil (“HFO”) and weaker local and Euro denominated costs relative to the US dollar. A $0.10 variance from the current HFO/LFO assumptions would result in approximately a $5.0 million change to mine production costs or about $20 per ounce. A 10 percent variance from the current Euro/USD exchange rate assumption would result in approximately a $9.0 million change to mine production costs or about $40 per ounce. The Government of Senegal sets the price of petroleum products monthly. In late December 2014, these prices were reduced on average 15 percent, the first reduction in 2014. The Company’s 2015 assumptions for LFO and HFO reflect these most recent price reductions and do not reflect any potential further reductions that the Government of Senegal may choose to enact. Administrative and corporate social responsibility (“CSR”) costs relate to the corporate office, the Dakar and regional office and the Company’s corporate social responsibility initiatives, and exclude corporate depreciation, transaction costs and other non-recurring costs. For 2015, these costs are estimated to be between $15.0 million and $16.0 million, including approximately $3.5 million for CSR activities. Sustaining capital expenditures for the mine site are expected to be between $6.0 and $8.0 million, capitalized deferred stripping costs are expected to total $8.0 to $10.0 million and reserve development expenditures are expected to total $6.0 to $8.0 million. Project development expenditures for growth initiatives including the cost to develop the Gora and Kerekounda deposits and costs to optimize the mill are expected to total $29.0 to $32.0 million. Of the total $49.0 to $58.0 million in total capital expenditures for 2015, $5.0 to $6.0 million relating to the mill optimization may be deferred pending the Company’s upcoming exploration and heap leach results to ensure the best allocation of capital for the Company. Total cash costs per ounce for 2015 are expected to be between $650 and $700 per ounce, in line with 2014. All-in sustaining costs are expected to be between $900 and $975 per ounce, higher than 2014 due to an increase in development spending on new deposits and expansion of the mill of approximately $125 per ounce. Total depreciation and amortization for the year is expected to be between $260 and $275 per ounce sold, $215 to $225 per ounce sold of which is related to depreciation on plant, equipment and mine development assets, and $45 to $50 per ounce of which is for depreciation of deferred stripping assets. In 2015, the majority of the capital to be spent on the Company’s exploration program will be focused on organic growth through (i) the conversion of resources to reserves; and (ii) extensions of existing deposits along strike on the Sabodala and OJVG mine licenses. As well, a modest amount of capital has been budgeted for the continuation of a systematic regional exploration program designed to identify high-grade satellite and standalone deposits. The Company identified a number of risk factors to which it is subject in its revised Annual Information Form filed for the year ended December 31, 2013. These various financial and operational risks and uncertainties continue to be relevant to an understanding of our business, and could have a significant impact on profitability and levels of operating cash flow. Refer to Risks and Uncertainties at the end of this report for additional risks.

MANAGEMENT CHANGE

Kathy Sipos, Vice President, Investor and Stakeholder Relations has left the Company to pursue a career change. As an integral part of the Teranga team since the initial public offering, Ms. Sipos was instrumental in the development of the investor relations program and established the Company’s CSR platform including the development of the Teranga development strategy (“TDS”). The TDS sets out Teranga’s plan to ensure our actions and investments are oriented towards the long-term, sustainable development of the region surrounding our Sabodala Gold Operation. It further underscores our commitment to a company-wide culture of CSR. Under Ms. Sipos’ leadership, the TDS has provided the foundation for a number of innovative partnerships with government agencies and several international and local non-government organizations to provide a range of programs in education, skills training, agriculture, health and education for the benefit of the communities and region in which we operate. Richard Young, President and CEO and Trish Moran, Investor Relations will be assuming Ms. Sipos’ investor relations responsibilities, while the CSR team will oversee our programs until a replacement is found.

BUSINESS AND PROJECT DEVELOPMENT

Reserves and Resources

Mineral Resources at December 31, 2014 are presented in Table 1. Total open pit Proven and Probable Mineral Reserves at December 31, 2014 are set forth in Table 2. The reported Mineral Resources are inclusive of the Mineral Reserves. The Proven and Probable Mineral Reserves were based on the Measured and Indicated Resources that fall within the designed open pits. The basis for the resources and reserves is consistent with the Canadian Securities Administrators National Instrument 43-101 Standards for Disclosure for Mineral Projects (“NI 43-101”) regulations. The Sabodala pit design, which remains unchanged and is consistent with the Mineral Reserves reported previously, is based on a $1,000 per ounce gold price pit shell for Phase 4. A re-evaluation of the final pit limits of Sabodala Phase 4 will be completed prior to mining and will use updated economic parameters at that time. Currently, the plan to mine Phase 4 in Sabodala is estimated to begin in 2016. The Niakafiri and Gora pit designs remain unchanged from December 2012. The Masato pit design has been updated and is based on an updated resource model, using a $1,200 gold price with mine operating costs reflecting current conditions. The Golouma and Kerekounda pit designs remain unchanged from December 2013. Resource models are expected to be updated based on drill programs recently completed, with subsequent pit designs and revised reserves estimates expected later in 2015. These have been based on a $1,250 per ounce pit shell, however, when comparing to adjusted cut-off grades to match current operating costs, minimal adjustments were required to match a $1,200 per ounce pit shell.

Masato Resource Model Update

Drill hole assays and surface trenching results from the 2014 advanced exploration program were incorporated into an updated Masato mineral resource model during the fourth quarter 2014. A total of 2,900 metres in 22 diamond drill holes (“DDH”) and 6,000 metres in 98 reverse circulation (“RC”) holes were completed in 2014. DDH drilling confirmed the interpretation of mineralized zones and infilled gaps to upgrade resource classification of Inferred Resources. RC holes were drilled at 10 metre spacing in 2 separate test block areas in oxide ore to test the continuity of portions of the high-grade sub-domains. Results confirm the nature of high grade mineralization in these areas, as well as overall shallower dipping zones than was previously interpreted. Due to the complex nature of mineralization, a total of 11 mineralization models were generated following non-linear trending structures. Mineral resources were estimated using locally varying anisotropies respecting local trends. Oxide densities were revised to reflect the gradational density difference associated with increasing depth from surface. Fresh rock densities were revised and averaged for mineralized and non-mineralized areas. A comparison of the reserve model against actual mined in 2014 indicates 2 percent higher tonnes, 5 percent higher grade and 8 percent higher ounces mined. This can be attributed to a shallower higher grade mineralization trend in oxides in areas delineated with wider spaced drilling. Overall, 72,000 ounces were added at Masato during 2014 including 16,000 ounces in the high-grade test blocks drilled. Due to the complexity of the high grade zones revealed from the 10 metre test block areas, extension of high grade intercepts will need to be continually updated as mining advances with 10 metre spacing from the RC grade control process. As a result, the high grade added in the updated model was in the near surface areas in Phase 1 where 10 metre spacing drilling occurred.
Table 1: Mineral Resources Summary Measured Indicated Measured and Indicated Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au Area (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 23.73 1.21 0.92 19.55 1.23 0.77 43.28 1.22 1.70 Gora 0.49 5.27 0.08 1.84 4.93 0.29 2.32 5.00 0.37 Niakafiri 0.30 1.74 0.02 10.50 1.10 0.37 10.70 1.12 0.39 ML Other Subtotal Sabodala 24.52 1.30 1.02

Borrower beware with payday loans

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REGINA – It’s a quick way to get cash when you’re short before a payday. However, the Saskatchewan government wants people to think twice before borrowing money from a payday loan lender.

In Saskatchewan, lenders can charge up to $23.00 in interest and fees for every one-hundred dollars borrowed. On a four-hundred dollar loan, that adds up to $92.00.

Story continues below

The loan, plus interest and fees, is due on your next payday and is withdrawn automatically from your bank account. If a loan is defaulted, the lender can charge up to a maximum of 30 per cent per annum on the loan principle and up to $50.00 for a NSF cheque or if a pre-authorized debit is dishonoured.

IN DEPTH: Chequed out: Inside the payday loan cycle

“Sometimes people don’t have a lot of options when it comes to borrowing money,” says Cory Peters, the consumer credit division director for the Financial and Consumer Affairs Authority of Saskatchewan.

“We want to make sure that people are aware of the fees and re-payment timeframes that are associated with payday loans.”

A Global News analysis by Patrick Cain has found a striking correlation between payday lenders and low-income, high-social-assistance areas.

Payday loan stores and welfare rates »

Payday loan stores and welfare rates

Payday loan stores and income »

Payday loan stores and income

The Saskatchewan government has six tips for those using payday loans:

  1. Use a licensed Saskatchewan lender;
  2. Know the costs – frequent use adds up over time;
  3. Loans are due on your next regular payday;
  4. Don’t take out a second payday loan to pay for the first one;
  5. Read the fine print;
  6. If you change your mind, you have until the end of the next business day to return the money and cancel the loan.

Report an error […]

Borrower beware with payday loans | Globalnews.ca

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REGINA – It’s a quick way to get cash when you’re short before a payday. However, the Saskatchewan government wants people to think twice before borrowing money from a payday loan lender.

In Saskatchewan, lenders can charge up to $23.00 in interest and fees for every one-hundred dollars borrowed. On a four-hundred dollar loan, that adds up to $92.00.

Story continues below

The loan, plus interest and fees, is due on your next payday and is withdrawn automatically from your bank account. If a loan is defaulted, the lender can charge up to a maximum of 30 per cent per annum on the loan principle and up to $50.00 for a NSF cheque or if a pre-authorized debit is dishonoured.

IN DEPTH: Chequed out: Inside the payday loan cycle

“Sometimes people don’t have a lot of options when it comes to borrowing money,” says Cory Peters, the consumer credit division director for the Financial and Consumer Affairs Authority of Saskatchewan.

“We want to make sure that people are aware of the fees and re-payment timeframes that are associated with payday loans.”

A Global News analysis by Patrick Cain has found a striking correlation between payday lenders and low-income, high-social-assistance areas.

Payday loan stores and welfare rates »

Payday loan stores and welfare rates

Payday loan stores and income »

Payday loan stores and income

The Saskatchewan government has six tips for those using payday loans:

  1. Use a licensed Saskatchewan lender;
  2. Know the costs – frequent use adds up over time;
  3. Loans are due on your next regular payday;
  4. Don’t take out a second payday loan to pay for the first one;
  5. Read the fine print;
  6. If you change your mind, you have until the end of the next business day to return the money and cancel the loan.

Report an error […]

Some CCT beneficiaries pawn DSWD cards in Bacolod

MANILA – The Department of Social Welfare and Development (DSWD) has confiscated dozens of cash cards meant for beneficiaries of the government’s conditional cash transfer (CCT) program in Bacolod City.

The DSWD said it discovered that 67 cards had been pawned by beneficiaries in Barangay Banago to local money lenders.

Eight cash cards had also been pawned in Barangay 35.

The DSWD said it is now preparing to conduct a spot inventory of cash cards given out, noting that the agency does not know yet if the same practice is being done in other areas.

Under a loan, the cash cards are given up as collateral for any amount of cash with a 30-percent interest rate.

The loan is payable in two months.

Family beneficiaries of the Pantawid Pamilyang Pilipino Program receive monthly dole-outs from government. In return, they are required to send their children to school.

Negros Occidental has more than 126,000 CCT beneficiaries, 11,200 of whom are in Bacolod City. — Report from Mitch Lipa, ABS-CBN News Negros; ANC

[…]

RadioShack Weighs $585M Financing Offer Amid Cash Woes

According to the Wall Street Journal, electronic and mobile products retailer RadioShack Corp. (RSH) is assessing a $585 million financing package in order to save itself from bankruptcy. The financing package is headed by UBS AG (UBS) and hedge fund Standard General LP.

UBS will organize $325 million, whereas Standard General will give $260 million, which will substitute a $585 million loan and credit facility from GE Capital, a part of General Electric Company (GE). Standard General and UBS do not plan to shut down stores. Rather, they will reportedly bolster the pace of renovations sought by the beleaguered company.

Last Thursday, RadioShack had revealed its dwindling cash position and the possibility of filing for Chapter 11 bankruptcy, going ahead, if it fails to improve its cash balance.

Despite attempts to turn around its business over the last 18 months, the company has continued to struggle. RadioShack’s core consumer electronics (including digital TVs, digital music players and digital cameras) retail business has been on a secular downtrend and is unlikely to recover in the near future. Moreover, loss of foot traffic is taking a toll on RadioShack’s mobility business – a platform which the company had been banking on for future growth.

Investors’ apprehension about RadioShack’s future increased further following dismal financial numbers reported for the second quarter of fiscal 2015, on Sep 11. The company’s adjusted loss per share of $1.00 was much wider than the Zacks Consensus Estimate of a loss of 59 cents. Meanwhile, total revenue came in at $673.8 million, down 21.8% year over year and below the Zacks Consensus Estimate of $742 million. At the end of the quarter, RadioShack had only $30.5 million in cash & cash equivalent compared with $109.6 million at the end of Feb 1, 2014.

Notably, comparable-store sales for company-operated stores and kiosks (stores and kiosks that have been operational for at least a year) were down 16.9% in the reported quarter, mainly affected by traffic declines and a slowdown in the mobility business.

RadioShack currently has a Zacks Rank #3 (Hold).

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Personal Investing Ideas & StrategiesProfessional ServicesRadioShackGeneral Electric CompanyUBS AG […]

Global Cash Set to Acquire Multimedia Games for $1.2B

Global Cash Access Holdings (GCA) recently agreed to acquire Multimedia Games Holding Company (MGAM) for approximately $1.2 billion or $36.50 per share. This represents a 31.4% premium to Multimedia Games’ closing price of $27.78 on Sep 5.

Las Vegas-based Global Cash provides services such as cash advance, ATM cash withdrawals and check services to gaming industry companies. The company also sells slot machines and jackpot kiosks.

Multimedia Games primarily sells slot machines. As of Jun 30, 2014, the company’s installed base was approximately 13,167 units throughout North America.

The deal is expected to be immediately accretive to Global Cash Holdings. The combined entity is expected to earn cost synergies of approximately $30 million, favorably impacting profitability.

The combined entity is forecasted to yield earnings before interest, tax, depreciation and amortization (:EBITDA) of $217 million and revenues of $800 million. The proposed merger is expected to be completed in early 2015.

Per Global Cash, the deal will diversify its revenue base, broaden product portfolio and enhance recurring revenue base (approximately 80%) thereby expanding margins. Global Cash Holdings believes that the acquisition provides it a significant cross-selling opportunity and will help it to penetrate new markets.

Global Cash announced that it has received financing commitment from Bank of America Merrill Lynch and Deutsche Bank for $800 million Term B loan, $400 million Senior Notes and a revolving credit facility of $50 million.

However, the debt financing will significantly leverage Global Cash’s balance sheet. As of Jun 30, 2014, Global Cash had cash & cash equivalents of $162 million and borrowings of $96 million.

Currently, gaming operators are replacing existing machines at a much slower rate than they have historically, primarily due to the challenging environment and the need to preserve cash. Frequent consolidations have also become a norm as large established players continue to search for distressed companies for cheap.

Scientific Games (SGMS) recently agreed to buy Bally Technologies (BYI), while Italian operator GTECH Spa is in the process of acquiring slot maker International Game Technology. We believe that the current deal makes Global Cash an attractive acquisition candidate in these sluggish market conditions.

Currently, Global Cash has a Zacks Rank #4 (Sell).

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Read the Full Research Report on MGAM

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Mergers, Acquisitions & TakeoversInvestment & Company Information […]

IPPR proposes payday-loan levy to help fund affordable lending …

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IPPR says a £450m levy on payday loan companies could support more than one and a half million loans of up to £250. Photograph: Jonathan Nicholson/Demotix/Corbis

A one-off levy of £450m on Britain’s £180bn consumer credit industry could create enough affordable lenders to take on Britain’s legal loan sharks, according to a report from the centre-left thinktank IPPR.

The proposals, which are being considered by Labour, say that as well as a legal cap on the total cost of credit, Britain needs a new generation of not-for-profit affordable lenders with enough capital liquidity and geographic coverage to compete with firms such as Wonga, QuickQuid and Payday Express.

The payday lending industry provides more than 8m loans a year, and has expanded from loans worth an estimated £100m in 2004 to more than £2.2bn in 2012-13.

Two-thirds of those who take out a payday loan have a household income of less than £25,000.

Stella Creasy, shadow consumers affairs minister and a leading campaigner against loan sharks, welcomed the proposals: “This report shows the scale of the challenge to get credit unions to compete given the demand for affordable credit. It also shows the need to recognise that personal debt is going to become more not less of a problem in the years ahead.”

The report suggests that local, not-for-profit lenders and credit unions could be hosted in Post Office branches or partner with Church of England parishes.

It says £450m of capital could support more than 1.5m loans of up to £250 at any one time. The lender would be able to charge a maximum of 3% a month, or 42.6% annually.

Borrowing £100 for a month under such a scheme would cost £3 against £30 for a loan of a similar amount from Wonga.

Ed Miliband has already proposed the introduction of a levy on the profits of payday lenders, which would double public funding to £26m for credit unions and other low-cost providers, but the IPPR says this is not sufficient.

The Financial Conduct Authority has promised to take a hands on role to regulate the industry, and there are also plans to introduce a cap.

Wonga’s representative APR is an astonishing 5,853%, the report says.

The £450m “windfall tax” would be levied across the consumer credit industry, with firms with the largest turnover paying the highest price.

Payday lenders should provide a clear “pounds and pence” cost for any potential loan, plus the payment rate and the term length. Affordability checks would be mandatory before a payday loan can be agreed. A statutory 24-hour cooling-off period between a loan request and that cash being paid would also be required giving borrowers the chance to think again and firms the chance to conduct proper affordability checks.

The new network of responsible lenders should cap the maximum loan at £250 (mirroring the average size of payday loans). Loans would be limited to one per person and lenders would be prevented from “rolling over” loans. A backstop reclaim mechanism through the benefits system would be introduced as a last resort to reduce the risk of default and bring down the cost of loans.

The report also suggests new government-backed saving incentives for people on low incomes, to support asset-building and reduce demand for payday loans. It says that 20p could be “matched” by the government for every £1 saved up to the first £20 deposited each month. The report says, if such a saving incentive were aimed at those in receipt of benefits or tax credits, and half of them were to take maximum advantage of it, 3.5 million people would gain £48 a year, at a cost to the taxpayer of just under £170m.

The report shows that two-thirds of low-income households have less than one month’s salary in savings at any one time, and 3.9 million families have insufficient savings to cover their rent or mortgage for a month should their income disappear.

Almost 9 million people already consider themselves to have serious financial difficulties, with half of the “over-indebted” population living in families on incomes below £20,000.

Mathew Lawrence, an IPPR research fellow, said: “Britain needs an initial capital injection to expand the provision of affordable credit and new ‘match saving’ incentives for people on low incomes to enable people to build up a stronger asset base of their own and reduce their reliance on credit.”

[…]

The Mark Of A Credit Score Will Not Close A Payday Loan Lender's …

Did you know you can get a free credit report from each of the three credit bureaus every 12 months? You won’t see the payday loan on there unless it landed on the desk of a debt collector. By viewing these reports you will be able to manage the information posted by creditors for current and past debt.

Free access to your credit history has been very helpful to many consumers. When creditors make errors reporting negative comments, it can be quite damaging. As a result an individual may be turned down for a well-deserved credit opportunity. Negative changes to current accounts may also result from these false reports. Did you know that it only takes one bad report to reflect negatively on interest rates that other creditors may charge? Think of a creditor as a vulture, hovering over your accounts waiting for any reason to raise your interest. We can laugh at the simile or cry at the truth, but accurate credit reports are important to current and future finances.

When you do obtain a copy of your report, you will want to comb through the data searching for errors. It may come in the form of wrong address or a misspelled name. Report all errors so they may be changed. If it is found on your personal information, give the credit bureau a call. Call the actual creditor if information reported to the bureau is incorrect. Look at dates, amounts and payments inaccuracies. Once this information is sent in and reported you are the only one who will care if it is right or wrong. Protect your finances by using the free credit reports and monitor the data.

The down side to these reports is the omission of the credit score. You have to sign up with a paid service to obtain the actual three digit number used so heavily by creditors and lenders. Look for service that offer free trial periods. You will be able to obtain your score and cancel the service before the first payment is expected.

Turning credit history into a credit score is an involved and almost secret process. The credit bureaus do not publish the exact algorithm used to obtain the number. It is generally well-known many aspects to obtaining good credit. It seems that poor money management tends to be one of the larger culprits creating low credit scores.

Once credit scores have fallen, there are many doors which will close as a result of the lowered number. One door which remains open is the payday loan industry. These small short-term loans offer small loans which are not based on credit scores. In fact, they have absolutely nothing to do with the credit bureaus. (Collections agents will report the debt if it lands on their desk) For those individuals who have a low score, these loans have offered assistance with emergency expenses. A payday loan works as a bridge between a due date and the next paycheck. It keeps late and overdraft fees from wasting more income. The loan work best when there is a payoff plan to back the full payment of the loan after the two week period. When paid on time, a payday loan is a cost effective approach to money management.

It makes no sense to monitor your credit if you have no intention on maintaining it well. Find out where you stand with most creditors and know that there is help even after those doors are shut tight.

[…]

Payday loans turn into debt traps | The Journal Gazette

WASHINGTON – About half of all payday loans are made to people who extend the loans so many times that they end up paying more in fees than the original amount they borrowed, a report by a federal watchdog has found.

The report released last month by the Consumer Financial Protection Bureau also shows that four of five payday loans are extended, or rolled over, within 14 days. Additional fees are charged when loans are rolled over.

Payday loans, also known as cash advances or check loans, are short-term loans at high interest rates, usually for $500 or less. They often are made to borrowers with weak credit or low incomes, and storefronts often are located near military bases.

The equivalent annual interest rates run to three digits.

The loans work this way: You need money today, but payday is a week or two away. You write a check dated for your payday and give it to the lender. You get your money, minus the interest fee. In two weeks, the lender cashes your check or charges you more interest to extend, or roll over, the loan for another two weeks.

The bureau?s report was based on data from about 12 million payday loans in 30 states in 2011 and 2012.

It also found that four of five payday borrowers either default on or extend a payday loan over the course of a year.

Only 15 percent of borrowers repay all their payday debts on time without re-borrowing within 14 days, and 64 percent renew at least one loan one or more times, according to the report.

Twenty-two percent of payday loans are extended by borrowers six times or more; 15 percent are extended at least 10 times, the report found.

?We are concerned that too many borrowers slide into the debt traps that payday loans can become,? bureau Director Richard Cordray said.

Some states have imposed caps on interest rates charged by payday lenders.

The industry says payday loans provide a useful service to help people manage unexpected and temporary financial difficulties.

[…]