Royal Nickel Corp. RNKLF

RE:RE:Big and good news: See Math below PR below, MassiveSave

[goldhunter11]

Geodan,
This is a good exercise (great job!) to illustrate the benefits of the new royalty agreement between RNC Huet and Morgan Stanley. A few comments below:
- It's a give and take situation. The other side Morgan Stanley has to get something in return to give some benefit to RNC, e.g. the 2% versus the old 1.75%.
- US$1740/oz was used in in a case study. Another case using, say $2000 would be of interest to illustrate the effect of rising gold price. (I would not advocate a US $5000/oz).
- Similarly, a production of 100,000 oz/yr for HGO lands (having Mt. Henry RE of over 1Moz in mind) at say PoG of US$2000/oz would also of interest.
- Note, as per Pierre's post, Huet was saying that Baloo is outside the royalty package. So, NRC pays royalty to nobody . Perhaps, that's why NRC is concentrating in developing the Baloo area (beside the softer ore/oxide) and put the Mt. Henry (in the royalty package) in the back burner. May be that's the reason for Morgan to be more agreeable to the new deal?
Cheers,
GH11
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Geodan2 wrote:

Morgan Threshold 

Technical Report: Western Australia Operations - Eastern Goldfields Page 22

September 2019 (A$1340/oz.)

 

So it is Aud not USD.  That means bigger savings. 1,340 Australian Dollar equals

924.08 United States Dollar

 

Wow need to recalc now. 

 

Let run the #s again at $1740 USD gold.  1,740 United States Dollar equals  2,523.43Aud

Old agreement at 50,000oz at HGO (ballpark ozs now):

1. First 10,000oz = 1.75% =$9,240,000 X 1.75%=$161,700+ A$1,183x10,000 x 50% = $5,912,000

New Deal: $1,183 x 27.5% X10,000oz = $3,253,250 +161,700 = $3,414,950 So saves A$2,497,050 on first 10,000oz 

 

2. At 50,000 oz production Old deal = $5,912,000 for first 10,000 then + 50% of $1,183 X 40,000 = A$47,320 X 50% = $8 million, so total = A$23,660,000 to Morgan Stanley

NEW DEAL: A$3,253,250 + 2% X (40,000X A$2,523 = $100,920,000) = A$2,018,400   That is Total A$5,271,650 or savings of $18,388,350 Aud or $12,681,552 USD!!!

 

Bottom  line a $12,681,552 USD savings if 50,000oz produced on Morgan land at $1740 USD. Morgan area is vast majority of acres I believe.   Mind boggling was not aware how oppressive the Morgan deal was.  They were paying that on Mt Henry .  Now Mt Henry worth a great deal more and their massive land package too.   This deal was done when gold was a lot less, now at over $2,000 AUD this renegotiation will boost profits in future a mind boggling amount.

 

Cheers