Breakdown of the Sandstorm royalty dealHey Easycoder,
I don`t have a $ value for you, but it seems far excessive for a piddly $300K cash, even in terrible junior financing times. It`s clear, as least to me, that the (very favourable to Sandstorm) royalty deal was intended as incentive for Sandstorm to provide $1 million in equity funding to Alexandria (in difficult times), and for Sandstorm to not insist on being granted (dilutive) warrants. Again, I do not expect it at all, but I am hoping - as Sandstorm will now be a substantial shareholder of Alexandria - that there was a 3rd incentive for the cheap royalty deal - to have Sandstorm provide a bit of liquidity on the open market by buying up a few million of the backlog shares that have been sitting there at the ``ASK`` for also the entire 2015 (after the Murgor deal). Again, I am not counting on it.
From Sandstorm`s NR:
``.................for consideration of C$300,000. The royalty package consists of a 1% NSR royalty on certain claims in Alexandria’s Cadillac Break property group, the assignment of a 2% NSR on the Roc d’Or claim owned by Integra Gold Corp., and the assignment of existing NSR buy-back rights, ranging from 1% to 1.25% on select claims in the Val d’Or area.``
1) ``The royalty package consists of a 1% NSR royalty on certain claims in Alexandria’s Cadillac Break property group``
This could hit us the hardest. Most of the Val d`Or properties already have NSR royalty claims between 2.0% and 2.5% - to either Tech or Iamgold, depending on the property. If they assign another 1.0% to Sandstorm, it could push the total NSR claims to 3.0 - 3.5%, on certain of the properties. I`m hoping that the 1.0% applies mainly to areas yet to be explored. Though, most likely they apply to our resource areas - Akasaba, Orenada and Sleepy.
2) ``the assignment of a 2% NSR on the Roc d’Or claim owned by Integra Gold Corp``
This is Integra`s Triangle Zone extension which I have posted about in the past. Sandstorm will get the 2% NSR. They will likely also get the benefits of the $1 million (1%) buyback if anything meaningful gets drilled on the property and if Integra decides to buyback the 1%.
3) ``and the assignment of existing NSR buy-back rights, ranging from 1% to 1.25% on select claims in the Val d’Or area.``
Here is where it gets a bit tricky. I have already mentioned about the Integra NSR buyback. That is an option for Integra to buyback the NSR. Alexandria also has some NSR`s in the Val d`Or area that work the opposite way, where Alexandria can dish out cash to buyback NSR`s currently held by other companies (for claims on Alexandria`s properties).
Iamgold holds a 2.0% NSR on 50% of Akasaba and the Bloc Sud (Bloc Sud West, Bloc Sud Trivio, and Sleepy). Alexandria can buyback 1.0% of the NSR for $500K.
Teck Resources holds a 2.5% NSR on the following Alexandria Val d`Or properties: Airport, Orenada, Mid-Canada, Ducros, Oramaque, Sabourin Creek, Lourmet, Orcour, Trivio, and Vaumon. I don`t see any NSR buyback options here.
Teck holds a 2.0% NSR on Alexandria`s Annamaque property. Alexandria can buy back 1.0% of the NSR for $800K.
Teck holds a 2.0% NSR on 51% of Alexandria`s Valdora property. Alexandria can buy back 1.0% of the NSR for $200K.
Thundermin Resources holds a 1.0% NSR on the other 49% of Valdora. Alexandria can buy back .5% of the NSR for $200K.
My guess is all of these buybacks (where it applies) have been assigned to Sandstorm, as part of the royalty deal.
4) The potentially lucrative West Zone NSR with Agnico
Agnico can buy back 1% of the 2% West Zone NSR for $7 million.
I don`t get the impression that this has been included as part of the royalty deal with Sandstorm, but there is not enough info in the documents to tell (for sure) either way.