RE:VOX royalities sopot,
The royalty formula is a bit complicated, but your rough estimate seems to be quite reasonable: 0.9% gross and 2.3% of the profit of $A 1000/oz, or US 667/oz, or with an assumed AISC = ~$US 1000/oz, noting that the AISC could be quite conservative for open pits operation for paleochannels and anything above 200-300m below surface. A few observations/take-away points follow:
- Presumably, RNC was aware of all royalties held by land owners before the struck te deal at HGO. So, to them there should be no surprise. They did not have to wait for VOX to announce their deals with land owners.
- Near the end of the 25 May 2020 NR: The closing of the deal would be subject to agreement with seller and operator's subsidiary (OPerator = RNC?). Presumably, RNC would try to renegotaite the deal with VOX to bring down the royalty?
- At least, the 2.3% net royalty (or roughly 3% gross: ore treated at the cost of $US 1.00/tonnes for 2gpt ore over the cost of US $29/tonne to mill) is much better than the current 6% GRR +1.5% NRS with MMX for BH.
- The royalty is exempted for the old Chalenger open pits, up to 50-60m depth (See Figure 4 of 19 May 2020 RNC NR). This level has two high grade holes JUPR 31 and 38 with 4.2gpt over 17m and 234gpt over 2m respectively. Note also that directly under the old pit, there are indication of mapped quartz veins (why NRC wnated to show this?). On option is to conduct new drilling in this area to confirm the grade, and if economical then NNC could continue the old pit down to the 50-60m level and pay no royalty?
- What about mining the "entension of the paleochannels" from the side of the Chalenger old pit (the blue portion in Figure 4). Would that be subject to the royalty?
- Ditto for the area below the blue zone down to 50-60m?
That would keep RNC busy for more than 1 yr, to bring up a few FDV size (30,000 oz load). Depending on how fast and how cheap they could dig this up, paying 3% plus 2.5% government royalty is probably not that bad, since they could keep 95% of the take (minus expenses of course, but this is assumed to be much less than $US1000/oz). A profit of 30,000oz (one FDV load) x $US 700/oz = US$ 21M = $Cdn 28M extra cash/year would not be that bad. If they could manage 2 loads/yr then 28M x 2 = $56M (rounding off to $50M)
GH11
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sopot wrote: Gold price - AUS$ 2595oz or AUS$ 83.40per gramm.
Royalities AUS$ 0.73 per gramm = 0.88% - that is before deducting any expenxes to produce that gold.
Profit ( just rough estimation ) from open pit - around AUS$1000oz or AUS$ 32.3per gramm = 2.3%
So, VOX royalities seems to be around 0.9% before any RNX deduction or expences to produce gold, which represents around 2.3% royalities value from profit.
Quick calculation, I hope I am right and close enough.