Ann: Flinders signs option agreement with Todd Corporation, page-29

I have done an NPV estimate.

Assuming FMS hive off the royalty into a new listed company (similar to FZR royalty over BRU's assets), based on the assumption that the new company has costs of $1 million p.a., indexed with inflation & no production for 4 years.
In year 1, we have a run rate of 10 million tonnes, then 20 million each year moving forward.
I have also assumed that the mine produces 250 million tonnes and ceases. The base royalty of $0.60 per tonne has been used.

This provides an NPV of $45 million.

In this scenario FMS (the parent company) would still have the funds from the sale of the PIOP.

So based on this, the value of the total assets is approximately $100 million.

This equates to approximately 3.6 cents per share.

If you assume $1,000 per tonne as a royalty, then you are looking at $75 million for the royalty company.

These assumption remove the effects of tax.

Personally I think this would be a good idea for FMS to look at. This way people could hold the speculative asset if the want and for those that want it, they could purchase the revenue stream.

I am not sure of what the tax implications would be. Personally I would think you would want the losses to be retained with the company to offset the royalty earnings.

Just my 2 cents worth (I mean approximately my FMS shares worth).