RE:news outThis looks like a good deal, especially for secondary Alexandria properties.
The deal is for Gwillim, Fancamp and Embry properties (Fancamp being the key property). Quinto has to incur $5 million in exploration expenses plus perform a prefeas study to earn the full 75% - the main parts of the deal.
In 2013, Murgor optioned Fancamp and Embry properties to Tomagold - no work was ever done. That deal was for only $1 million exploration expenses and $270K cash paid to Murgor (plus a few shares of course).
The 2013 deal was 70/30. This deal is 75/25.
However, this deal has a 10% downside bottom (carried interest), even if Alexandria decides to not contribute towards operating expenses (after the $5 million deal runs out).
Also, Alexandria gets to retain a 2% NSR. This (along with the 25% or 10% ownership) will have value one day, either to sell or to keep, as the chances are good that Fancamp will one day go into production.
If Quinto moves the property aggressively forward, we could also benefit from 25% production several years down the road. I believe the property has potential for a large enough resource to support an operating mine. Also, the property is close enough to Iamgold`s deposit to work out processing arrangement, if Iamgold decides to put in a processing plant in the future.
The likely scenario will be Iamgold buying the Fancamp property from Quinto and Alexandria, after Quinto drills up the resource. Iamgold could then add Fancamp to its Monster deposit, to justify building a process facility. Under this scenario, Alexandria would like get good compensation for its 25% ownership, yet still retain the 2% NSR on production.
Clearly, this new deal is far superior than Murgor`s 2013 deal.
https://www.marketwired.com/press-release/alexandria-enters-into-option-agreement-with-quinto-real-capital-corporation-tsx-venture-azx-2126792.htm