RE:RE:What's the value of the 1% NSR on Treaty Creek?BB, I think your calculation is at the high end for the current resource. Funny, but your Seabridge example is almost the exact same size of the current Goldstorm Indicated Resource of 23.37 million oz AuEq. So your example of C$ 476 miilion is a good ballpark figure for an undiscounted value. Of course, this ignores the Indicated resource (18.75 million oz AuEq), ongoing expansion, and discounted NPV. Plus ignores all other zones on Treaty Creek.
Probably at the low end of the possible valuations, is what AMK sold their 1.02% NSR for. Any guesses? Turns out on Sep 30, 2021--after the Initial Resource of Indicated 19.4 million oz AuEq; Inferred 7.9 million oz AuEq--had been published, AMK sold it for $227,000. Actually, it was 100,000 Tudor shares that had a market value of $227,000.
This is crazy to me. Had I known AMK was considering and willing to sell their NSR for $227,000, I would have personally made the offer. This could turn out to be generational wealth for a family trust. If they end up producing a million oz per year, that is somewhere close to 10,000 ounces a year. That translates into the neighborhood of $20 million per year for 20 years! Not a bad investment if you are willing to wait a decade.
Of course you can argue uncertainty, annual production, gold price, discount rate, etc. But you will also see a much larger deposit in the end, and likely much longer mine life. Whether the mineable reserve is larger or smaller than the 23 million ounces, is yet to be determined. I expect it will be more, especially given the satellite deposits elsewhere on the Treaty Creek property that will eventually be drilled and possibly developed.
What a crazy valuation range: AMK says $227 thousand. Others could argue for $400+ million!
bigboy999 wrote: Here's a case study from TUO's website. Factor in how many ozs' you think TC will yield and you'll have a good idea. Don't forget to multiply ozs' by .2. It's no small thing.
Case Study #1 calculation: Seabridge Gold’s Snowfield property currently has a resource of 25.9 million ounces of gold (1,370 million tonnes at 0.59 g/t gold). Assuming 90% of this gold is recoverable, we are left with 23.3 million ounces. Subtract 10% of this for typical NSR deductions: that leaves 21.0 million ounces, of which 1% or 210,000 ounces is payable to the royalty owner. Value at the current gold price of $2,268 CDN is $476 million.
GTLA, I think our ship is finally coming in .......... BB