Abitibi Royalties Inc ATBYF

RE:RE:rzz

[malloney25]

"Ian mentioned acquiring new royalties in the region.  I would love to know what kind of projected rate of return hurdle they require before making an investment in a royalty."

Well RZZ had this campaign of aquiring obscure royalties going like 1-2 years ago called 'royalty search'. They offered cash-strapped small explo companies and individuals to cover the costs for keeping their grounds in good standing for several years in exchange for a royalty. Part of the deal then was that they promised to give you a 'yes' or 'no' to every land piece offered within 24h. And this included dealings on properties 1000's of km away like in Turkey. There is no way they could have done any highly specific DD on these situations within 24h. So it's obvious that in such cases they take a shotgun approach, hoping for the best instead of messing with a 'projected rate of return hurdle'.

But I think it's a good move, be it during the 'royalty seach' or around Malartic, because aquisition costs for such obscure deals have been very low. Matter of fact I think it's much more sensible than trying to enter bidding wars with the likes of OR, MMX, SSL et cetera. Although it would certainly be nice to see RZZ not dependent on one single producing royalty only, ROR's on the more prominent royalties shopped these days have become very slim for my taste. Apart from the fact that RZZ would be maxed out cash wise after very few bigger dealings anyway.

Let just 1 in 30 of their tiny deals under the shotgun tactic work out, in the long run that'd be a lot more profitable than trying to fight the big boys on their turf financially.