OTCPK:MEAOD - Post by User
Comment by
Margreton Oct 15, 2012 12:14pm
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Post# 20484390
Royalty %
Royalty % I think both the Industrial Alliance Report and the Oct. 28, 2011 audited financial report is consistent and right. Industrial Alliance says the total NSR payable by the company is $1.75m which refers to the maximum payable for the 2% royalty on Bachelor Lake. That is a fixed amount payable because they don't say per year. Once the $1.75m maximum is paid, the 2% royalty disappears. There is a separate 1% NSR. This 1% is what Industrial Alliance uses as the ongoing royalty in their estimates. GRO says they have this 1% NSR and MTO can buy back half of it for $500k, 18 months after commercial production. So MTO's final long term royalty is only 0.5% (that's not much, about the cost of the restaurant bill for the fat cat management). There might be a separate 2% royalty for Hewfran.
(The GRO corporate presentation mentions an "assumption" of 5% which i think is wrong. I think they got this from adding all the % from an old Bachelor technical report. Since then the 1% Halo Resource royalty was bought back according to Industrial Alliance, 2% is for Hewfran, and the other 2% is capped at $1.75m)