RE: RE: RE: SND's chart is looking bad! We did pay and it is dilutive to shareholders.
OK, I was WRONG! About the ETG stream. I was re-reading the NR's and ETG's presentation (slowly, at home).
Ok, check this out:
ETG has mineral reserves of 27,000,000 tonnes at a grade of 1.85% copper and 0.72 g/t gold.
Now, the ETG website says this has a NPV of $129 million. What I missed was that, because this is a NPV, it would include CAPEX, which we are not responsible for.
So here goes:
27,000,000 tonnes x 1.85% copper x 20% entree gold x 2.5% SND interest x $3.00 net x 80% recoveries = $13.2 million
My understanding is that this portion of HNE gets mined in 2015, with the remainder of HNE / Heruga to be developed at a later point in time.
So within the next couple years we are looking at getting back $13.2 million for a $5 million upfront investment today (via shares to SSL). If I understand correctly, this portion of HNE gets mined so that the OT JV can get to the rest of their deposit.
So, to summarize, we paid $5 million, we should get about $13 million back in the next 2-3 years, then we have a remaining stream that, if the property is developed, would earn us about $4 million / year for > 50 years.
Not bad! Recovering our entire initial investment and an additional $7 million in the next 3 years sounds pretty good.
Interestingly enough, for SSL, they stand to earn about $37 million, or almost their entire streaming investment, over the first 2-3 years from this portion of HNE. The SSL deal makes a lot more sense when you take into consideration they are paying $55 million for a stream that could earn them $30-$40 million/year for > 50 years, but they get almost $40 million back in the next 2-3 years!