25% Option Exercise Price Anto has the option to buy 25% in the TMM JV after BFS. The exercise price is based on the 10% unescalated pre-finance post-tax NPV. So obviously yes, for Anto a lower NPV is better and for DM a higher one.
As you might expect, given the inherent subjectivity in NPV assumptions, the exercise price is pinpointed in the agreement.
- "Metal Price Assumptions for the purposes of the NPV calculation shall be based on an average of the most recently published long term metal price forecasts from [..] Brook Hunt & Associates, CRU International and Bloomsbury Minerals Economics"
- Both Duluth and Anto have the one-time right to request an independent audit within 60 days of BFS delivery. "The challenging Member shall bear the burden of demonstrating to the Company that there is a reasonable basis for concluding that there was an error in technical calculations and financial calculations, or that the BFS Firm unilaterally made assumptions without consulting the Technical Committee, as the case may be."
Please refer to the TMM Participation and Company Agreement (page 32) in the link below. The option section is only a couple of pages, so it's worthwhile to have a look. We can rest assured we will not be mangled by Anto.
Hold tight.. the PEA which is nearing completion. I expect that the size, mine life and NPV will blow the market back to its senses. Don't be sore, buy some more.. full disclosure: I bought a block in the recent financing.
Regarding Dundas: he is fully engaged with 3M shares + options. So while the boat is undeniably in stormy waters, Dundas is in the same boat.
GLTA.
https://sedar.com/GetFile.do?lang=EN&docClass=14&issuerNo=00023735&fileName=/csfsprod/data109/filings/01613217/00000001/h%3A%5CDuluth-Main.pdf
(if the link doesn't work, you can access through SEDAR. It is the Material Document posted Aug 2, 2010)