Maritime Resources Corp V.MAE

Keats Royalty Buyback by NFG…rationale

[nozzpack]

Below is a post on this News released this AM by NFG.......mining of Keats Trench is now highly motivated due to the enhanced value of the Royalty to Senior Golds..

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The purchase of all NSR for QWS is a long term investment, since exploitation of QWN is being prioritised.

 

Since QWN now has a fraction of 1% NSR then the circa 100Km property is practically royalty free.

 

There is a possibility that the board may be preparing for an eventual sale with a very high NSR payable by Big Gold.

 

The rationale for this is that, if the mining profitability were to be shown to be exceptional based on the near surface grades, then a very high buyout price would be sought by NFG.

 

Since most Big Gold companies would be reluctant to raise a high cash buyout price, or alternatively, dilute their equity before profits from QWN start to flow, then they could be tempted to offer an exceptionally high NSR to NFG.

 

A similar deal was made by AEM when they bought Canadian Malartic from Osisko.  My recollection is that they are paying about 5% NSR.

 

In this scenario, NFG could become a Royalty company which would result in a very high PE multiple.

[nozzpack]

Channel sampling of Keats Trench by NFG yielded an average gold grade in excess of 15 grams per ton. The NR stated that the spatial distribution and grade of drilling below the Trench was consistent with that of the surficial sampling. Bulk sampling of 100,000 tons of ore  at 0.5 ounce per ton would yield about 50,000 ounces valued at $180 million CAD. With the only excess milling capacity

[nozzpack]

85% purchase price is what Dynacor pays delivered to the mill. If Maritime contracted to mine and transport , the price paid to Maritime would be about 75% of spot rather than 85% delivered ..

[NineLives]

Good post nozzpack. Very busy these days but a couple of points. Yes I did buy into this story, not a huge amount (less than a million shares) can see a quadruple here easily. The point you make about the mill is valid, Maratime could in essence buy all the gold  that's milled for a third party, pay them spot minus 15 to 25% and then make an extra $50 an ounce selling the Gold forward 3

[nozzpack]

Thank you. We are rapidly filling in the milling capacity of the Pine Cove mill. As a former Dundee shareholder, they are strident planners of projects with definitive execution plans befitting the forward project requirements . I can assure you thst they won't fluck around much more with the hee hawing by an indecisive NFG management . We have other fish to fry on the line. So I expect a