OTCPK:MEAOD - Post by User
Comment by
JRaffleson Oct 31, 2015 5:18am
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Post# 24246307
RE:Do I need to paint you all a picture - major time here @MTO
RE:Do I need to paint you all a picture - major time here @MTO can unilaterally change to 100% production (or any % it wants) on ore sourced from elsewhere at its whim without consent, notice, or penalty from Sandstorm.
That is correct, but commercially is only of marginal effect, the reason being, in order to change mill production from Sandstorm's 20% gold stream:-
- it would have to ship ore in from elswhere - we have already tried Barry.
- it would have to abondon the new rich vein (which is within Sandstorm's 1.5km from the shaft). Why would the board raise PP funds for drillingm if it could be mined to abondon and mothball CL, in order to deprive Sandstorm of its 20% of ore.
- If the new vein were to profuce grade at, say 10%, then shareholders would still receive 8% grade + $500 from sandstorm. In this scenario, Metanor woul dhave to source ore beyond 1.5km from BL in order to avoid payments to Sandstorm.
- Even if Metanor found ore 1.6Km for the BL shaft, Sandstorm's contract enables it to pay 20% of the up fromt cap expenditure and then benefit from a 20% gold stream for life.
In summary, Metanor would theoretically be able to source elswhere, but the circumstances where it would benefit Metanor are very limited.