RE:Coro Signs Binding Heads of Agreement for San Jorge
It looks small but frees up significant cash for COP. In short, COP would get minimum 4.5million plus 2.5NSR (ex-Au) in case the consortium exercises for a full 100% within 6 months. But on top the consortium takes over the underlying proprty and royalty payments due to Franco Nevada and those would have been a minimum of 11+million over the next 9 years:
Acquisition Terms:
Annual payments of $1.25 million, for 10 years, payable quarterly, commencing in the quarter ending March 31, 2012 ($0.9 million paid in October 2012). In addition a 7.5% net smelter royalty ("NSR") payable on all gold produced from the property. The annual payments are not payable when that payment is exceeded by the gold NSR payment. Coro may at any time, prepay the outstanding amount with a one-time payment equal to the net present value of the future payments, using a 5% discount rate. No other consideration, obligations, payments, or royalties are due, and Coro may withdraw from the Agreement at any time by not making the due payments.