mutiny gold - looking forward, page-30

AJTRADER

Excellent posts and well thought out but I see LeDerps points are also valid.

"Please dont over complicate the deal with Sandstorm, keep it simple, MYG are getting $500 a ounce for 15% of their gold produced."

"You always seem to highlight the negatives - not the fact they are receiving 41million up front for doing this."

I have a negative but if you can point out the positives that would be great.

15% of the gold produced over 8 years is 66 300 ounces, without taking into account the potential $4 mill bonus or the equity the amount they have forwarded MYG is $36.5 million. This with the $500 they get for every ounce is $1042 per ounce of gold over the 8 years. Thats a hell of an interst rate for the $36.5 million up front.

On a gold price of $1750 Sandstorm will make $46.94 million profit over 8 years for their $36.5 million dollar investment. I know this doesnt take into account the 2.5% inflator but inflation per year is higher than this so the cost to produce will also be higher.

Also I cant see with the MPA at what year or ounces produced the deal ends so in theory if the LOM extends past 8 years does Sandstorm still get their gold for $500 an ounce? This will send the company to the wall, a gold hedge would of been more cost effective.

Even if they buy back half the MPA for $24 million after three years it works in favour of Sandstorm and they make a even bigger killing. $17 million profit over 3 years for an outlay of $36.5 million then $24 million is returned and they make $10 million on the remaining $12.5 million over five years. In the Key Financial Analysis I cant see where they have taking out the profit made by Sandstorms 15% of gold production and have used total production as MYG profits.

If it can be pointed out the life of the MPA to me perhaps this would change my view to investing. What would the P/E ratio on a 8 year mine life be?