RE: Brigus Gold , Goldstream Buyback Josa:
RE"If 4% of the buyback equates to 24.4 million dollars, would it be fair to say that a 100% is 25 times 24.4 equals 610 million dollars."
[S] At the risk of attracting the venom of the resident experts without (face to boardroom) mining experience I choose the do my (Q & D ... back of the envelope) analysis as follows:
1. Assume steady state production of 100 000 Au equivalent OZS/year.
2. Pre-buyback saw 88% (88 000 Ozs) going to BRD directly (@ $1 700 & $ 800 COP) = ~$ 79.2 mln
2.1 From the 12% Stream BRD would get ($500 from SSL and $800 COP) = NEGATIVE $3.6 mln.
3.0 Buyback of 50% of the 12% stream would (by extension) mean ...
3.1 The remaining 6% SSL would cost BRD NEGATIVE $ 1.6 mln.
3.2 The repurchased 6% will provide an absolute benefit of $7.2 mln (6,000 OZ @ $1 200)
3.2.1 Meaning BRD will not be subsidizing a $300 shortfall for each streaming ounce. ( $1.8 mln).
3.2.2 BRD will have a NET benefit of $900 per ounce (6 000 x $900) = $ 5.4 mln.
BOTTOM LINE:
Instead of being NEGATIVE $3.6 mln (ANNUALLY) for the original (12%) stream the repurchase of 50% (6%) will be bringing in to BRD's coffers $5.4 mln ANNUALLY (can now use NPV calcs for 10 years at x%).
NET change/impact to the BRD bottom line is $7.2 mln ANNUALLY.
BWDIK? NO STREAM ON THE GREY FOX property. TA does not reflect infill drill info and the production and overhead savings from the incremental production from GF.
Hope this helps.
Cheers
Stanley