OTCPK:MEAOD - Post by User
Post by
JRaffleson May 18, 2013 12:50pm
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Post# 21413855
SSL contract conditions
SSL contract conditions Which of these SSL contract conditions is going to present most problems for Metanor ……
| SSL contract dated 14 January 2011 |
| Clause | Metanor’s obligations |
| 3 (d) | Within 48 months of the [January 2011] contract date, Metanor must have produced a minimum of 50,000 ounces over a 12 month period, of which 10,000 ounces are due to SSL. It seems that 24 months will have passed before Metanor will reach their production target of 5,000 ounces per month. However, this target should be achievable before January 2015….. |
| 3 (e) (i) | A minimum of US$1m in cash flow payable to SSL in calendar year 2012. Assuming gold @ $1600 ounce and therefore SSL revenue at $1100 ounce (gold less their contribution per ounce). Then Metanor must produce 909 ounces for SSL ($1m/$1100). This is equivalent to total production of 4545 ounces in calendar year 2012 (909 oz / 20%). Therefore Metanor needs only to reach less than one months budgeted production in 2012 in order to meet this contract requirement. This assumes that gold averages $1600. |
| 3 (e) (ii) | For the calendar years 2013, 2014, and 2015, Metanor should generate US$5.5m for SSL. During these years, if the average price of gold were assumed to be $2000, then this would return $1500 to SSL after their payments per ounce. Therefore, this would require 3666 ounces of gold to be supplied to SSL and Metanor’s calendar year production of 18333 ounces. Once again, this is a soft hurdle and not one likely to cause concern to Metanor shareholders. |