Lydian International Ltd T.LYD

This joint venture deal is a real shame

[junior_miner]

Newmont will scoop 70% of any property under agreement for pennies and LYD needs to still contribute their portion of capex.


5.16.1 Newmont Joint Venture Agreement
Among the provisions of the joint venture agreement are:
- The joint venture is a 50%-50% contribution with Lydian as manager. Failure to
contribute results in standard dilution, there are no claw-back agreements and interests
can be freely transferred with a first right offered to the other party.
- Newmont has two options to increase its interest. The first is an option to earn a further
20% by funding the project through a feasibility study stage; the second option allows
Newmont to earn a further 10% by funding through to commercial production. At
commercial production Newmont will recover the share of project debt advanced to
Lydian, plus interest, by receiving 85% of production dividends and distributions until
the full project debt has been recouped.
- Allowance is also made for either party to dilute by not contributing to a program. If a
party dilutes to 15% on a specific project, it relinquishes its’ rights in return for a net
smelter return royalty of 1%.
- Newmont has the right to purchase up to 30% of any initial public equity offering by
Lydian and to maintain that interest by participating pro-rata in any subsequent equity
offering.