additional royalties, page-2

this was posted by Suti at sc recently:
thanks to suti.
(suti seems well informed)

Am I the only one to pck this up from KZL's Q report:

Mt Garnet

At Mt Garnet 425,000 tonnes of waste was removed from the open pit and 2,000 tonnes of ore was stockpiled. It is planned to process material from the Mt Garnet open pit during January to March 2008 by which time a stockpile of approximately 200,000 tonnes at 6 percent zinc and 0.4 percent copper will have been established.

Why is this significant? Back to the Royalco website:

Kagara Zinc Ltd (ASX: KZL, website: www.kagara.com.au ) is the operator of the project located 150 kilometres west of Cairns in North Queensland.

Kagara’s initial zinc production commenced from the Mt Garnet open pit in early 2003, before switching production to the Surveyor open pit later that year. Kagara has a number of zinc deposits within its portfolio and is not scheduled to return to the Mt Garnet orebody until 2009/10. Since commissioning in 2003 the central plant, located at Mt Garnet, has undergone a number of upgrades with a current stated capacity of 137,000 tonnes of concentrate per annum.

The royalty from Mt Garnet commences once 24,000 tonnes of contained zinc has been produced. Total zinc production to date from Mt Garnet stands at 12,300 tonnes. The royalty rate is based on a 3% net smelter return.

Kagara had indicated that production from Mt Garnet was scheduled to resume in 2009 although recent announcements of successful drilling results suggest that mining may recommence earlier.
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By March 08 KZL will have stockpiled 200kt @ 6% of zinc. This equals 12000t. Therefore after this stockpile gets processed, RCO's 3% NSR gets activiated....Based on my calculations, this royalty has the capacity to be worth 4m a year for a few years and with the Reefton royalty, this could mean RCO has cashflow of 8m/yr....Oh did we mention that we also have drilling prospects starting up?