Great Bear Resources Ltd. GTBAF

RE:RE:RE:RE:2% Nsr

[lumpy13]

There is some misunderstanding of what GBR's 2% NSR is worth.  It is the price of gold, less the cost of smeltering it, times 2%, times the number of ounces produced. 

Hence, say GRB produces 100k oz/year, with $1,500 gold and $100/oz smelter costs (actually, I have no idea of what are normal smelter costs.)  

So the 2% NSR would be 100k x $1,400 x 2% = $2.8m/year.

The NSR is currently in a subsidiary of the company so wouldn't have any separate shareholder value unless spun out.   My sense is that it's essentially a bargaining chip.  

If there is an unfriendly takeover, the subsidiary could be spun off, which would provide shareholders a 2% NSR.  More importantly, it could be used by GBR to negotiate a better takeover price in return for dropping the NSR (or not spinning it off to shareholders).

If it were spun off, and shareholders received shares, the shares would likely be more valuable to a streaming company (FNV, WPM, etc) than to the shareholders.  So I would expect streaming companies to acquire the shares, driving up the price.