Laird royalty purchase Let me see if I get this straight.
CCU paid Mrs. Mary Elizabeth Dunn $269,540 cash and 245,000 common shares of Copper Fox for 1.47% of the issued and outstanding shares of Liard at a time when CUU’s share price was about $2. That equates to about $269,540 + $490,000 = $759,540.
Liard holds a 30% Net Profits Interest (NPI) royalty in the Schaft Creek project. If $759,540 equals 1.47% of the Net Profits Interest royalty, then from the perspective of shareholders, that 30% royalty on net profits is being valued at about $759,540/1.47% = $51.7 million. And, if $51.7 million is equal to the 30% net profits royalty, then the implied 100% of net profits is $172 million.
Put another way, elmothefearless pointed out that CUU increased its profit interest by 1.47% x30% = 0.441% to 23.75 (from 23.35%). $759,540/0.441% = $172 million.
Given that the 2008 preliminary feasibility study produced a $2.764 billion NPV after capital recovery and before taxes, I would conclude
1. Mrs. Dunn believes the value of CUU is much higher than $2.
2. The deal is good for CUU shareholders.
3. CUU management is operating in the interest of CUU shareholders.