Sandstorm Metals & Energy Ltd STTYF

RE: RE: RE: No minimum payment guarantee?

[elmothefearless]

You nailed it aagold.  The minimum payment guarantees are necessary as it provides leverage for SND management.  Case in point, the recent extension of the TBD agreement because of low gas prices.  Without the minimum drilling / payment commitments provided by TBD, we would have been hooped and left sitting around with our hands in our pocket for TBD to drill.  

 

If SND had really wanted to, they could have demanded their cash payment and forced TBD to raise cash via the equity markets, undoubtedly at a terribly dilutive price.  

 

I don't think it's accurate to say that the RDA payment guarantees were worthless.  They provided the foundation for SND's senior creditor claim, which allowed us to take ownership of RDA's coal properties.  Now we turn around and sell them.  Without the minimum payment guarantee backed by senior creditor status, we may not have had the legal grounds to seize these assets.