As an investor new to Helium investing, this raises questions. See chart below -> as much as I like the prospectiveness of the BNL assets, I do not like the size of royalties they will have to pay once they become a producer and bring in revenue. Using the 90% likely producing assets case below, the royalty payout rate (once they are producing) is 38.1%. I assume this is an offset to taxes?
Questions:
Is this royalty commitment normal vs comparable producing businesses?
Is this royalty net of tax or is tax added on to this? Or, are there tax credits for such?
Is this business competitive overall with its cost structure relative to comparable businesses?
Would this make the business more focused on fattening up the asset to sell it to a bigger player (with no intention to actually produce in the future)?
It is not necessarily a negative for the business to focus on fattening up for a sell, but I would be monitoring the business carefully for dilution and G&A expenses going forward to make sure they are taking the 'develop to sell' path in a shareholder-friendly manner.
Which way are they going?
BNL Price at posting:
3.5¢ Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)