7 % royalty on net revenue is quite hefty, and represents a 130% (!) increase on the previously used 3% royalty figure. In my eyes, this is hardly a good outcome, but since Argentina is on the brink of bankruptcy, I am not overly surprised.
This increase will greatly impact the profitability of The Hombre Muerto project in a negative way obviously. Luckily, Galan will be quite possibly a 1st cost quartile producer even with the excessive royalty, so the project will presumably be going ahead.
It would be great if Galan can provide updated NPV and IRR metrics in a due course reflecting the increase in royalty.
Ann: Galan Signs Pivotal Commercial Agreement with Catamarca Govt, page-56
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