RE: RE: you don`t get it Huh.
Neither the releases nor the MD&A spell out exactly why 25% of the payment is held back every quarter, then topped up once a year, but here’s what the company’s Jul 10 release has to say about it:
“Interim quarterly payments were made throughout calendar 2011, estimated by HudBay Minerals Inc. to represent 75% of 6?% of the net profits from the 777 Mine in Flin Flon, Manitoba, plus
.25 per ton of ore mined. The remaining 25% is paid with interest annually in July 130 business days after the financial year end of HudBay Minerals Inc.as per the agreement. The above payment represents the balance of the 25% withheld over the four financial quarters ended December 31, 2011, adjusted to reflect final calculation by HudBay Minerals Inc. of the net profits interest.”
I always figured that the holdback had to do with the difference between the estimate and the actual receipts once the metals have been sold. Surely, if the final gross number to be input into the calculation is based on London Spot, there’s no need to hold back ¼ of the money.
This, of course, begs the question: How does the forward sale of the Au and Ag from the 777 impact the Callinan Royalty?