Jim with a Q & AFri Jun 16, 2006
Q&A : Why No Agreements on License Options?
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Dear Jim,
One question on Tanzanian Royalty's activities in Africa. Why have we not seen any agreements take shape on the available license options of the company? What's it going to take to get the majors interested beyond the few that we have optioned out? What is the company's strategic plan in this area? Does it require "proving ourselves" thru our own exploration results on the options first or is it a matter of the gold price going steadly higher that will attract much more interest over the next few years? I appreciate any comments when your time permits.
Dear Mr. K.....:
The derivative losses being experienced by the majors have required them to defend their balance sheet positions rather than spend on new reserves. They are primarily focused on projects that are far advanced towards exploitation. However, there are very rich groups wishing to own minerals that are willing to pay us cost plus 25% to complete the exploration on our licenses and then exercise their option agreements - assuming of course they are successful. Like all things we have done, this is a unique nitch business and we are going full speed ahead on bringing in deals like this home. We do have majors out on our properties under confidentiality agreements who are looking at nickel and gold. There is go guarantee that a shopper will become a buyer, but there is good activity in what you might consider our "show room."
Best Regards,
Jim