Ann: Pre-Paid Royalty Mandate, page-5

This issue is swapping short term pain for potentially long term pain. Every project chasing development funding needs to demonstrate sufficient 'risked' margin to repay interest and debt. Royalties are a deduction from the revenue, reducing whatever margins the project is making for debt repayment and shareholder dividends. Royalty Streaming is what this sort of funding is called in Nth America, and it's a lot more usual than over here. Done well, it can increase shareholder returns verse up-front dilution in raising equity.

HVY already has 6.5-7% royalties between state and vendor as per the SS, though I haven't looked to see the original reference. Will be interesting to see what sort of royalty rate investors demand for how much working capital this far out. Over time, two extra royalties will take total royalties to what?... 10% royalty for example is a heavy burden before opex is even considered...

GLTAH