Royal Nickel Corp. RNKLF

RE:Royalties

[ProfBaIthazar]

The existing royalty obligations for SLM at Beta Hunt are:

1 - Consolidated Minerals Pty Ltd, 3% of payable nickel (at a nickel price under A$17,500/t) or 5% (at a nickel price of A$17,500 or greater) until total royalty payments reach A$16 million;

2 - the Western Australian state government, 2.5% of recovered gold and nickel; 

3 -  Maverix Metals Inc., 1.5 % of payable nickel less allowable deductions, 6% of recovered gold and 1.5% of recovered gold less allowable deductions.

2.5% + 6% + 1.5% = 10% 

https://www.rncminerals.com/beta-hunt-mine

arh0070 wrote: Whilst focusing on the royalties might seem obscure it is of critical importance to any future profitability of RNX .These are the highest royalties I have ever seen on any mine.I dont know the details of the royalties ,and whether there is a buyback provision .That would be a question for RNX management .These royalties last year generated 10-11 million for maverix on limited gold production ,if in fact production goes up to say 200,000 ounces per year that will be 15000 ounces of gold equivalent to maverix at no cost to them ,say about 20million dollars off the top .For a p/e of 5 to buy back these royalties would cost 100 million at a minimum unless there is a buyback price agreed to .Combined with all the other expenses entailed in buying the plant and running the company you are looking at 1Billion plus RNX shares out .I have no idea if the market would tolerate such a massive dilution but I doubt it would do so without a major decline in share price and the inevitable reverse stock split .All the above is predicated on them actually proving up reserves and being able to expand production up to 200,000ounces per year ,no easy task .
No matter what the booster club both unpaid and likely paid says I am totally mystified by Mr Sprott,s investment in RNX .