GREY:ADEXF - Post by User
Post by
Greenandgold.on Jan 26, 2012 7:37pm
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Post# 19454983
The Toxic Royalty
The Toxic Royalty Roche Bay PLC has a 6% gross overriding royalty on concentrate production at Roche Bay and Tuktu, that can be reduced to 3% with a $35 million payment (plus inflation factor). The buyout is close to AXI's total market cap.
Serious question: this is one of the worst royalties any of you have seen in the mining world, right? I haven't seen a more punitive royalty in a deal made in the last 10 years.
Tuktu is toxic with that 6% royalty. Nobody in their right mind wants to invest in a property with a 6% royalty and a massive buyout.
(For comparison, Champion Minerals is encumbered by a 3% royalty, which it can cut to 2% with a $3 million payment. That's what a "normal" deal looks like.)