AUD$2.8 doesn't reflect the farm in costs for Red Emperor. They will pay $13.5m min for 10% and US$18.5m min for 20%
Key points from the ASX RNS - - RMP have to pay 20% of drilling costs for first Dharoor well up to US$25m then 10% thereafter. - The additional 10% interest they have until the 31st August to enter they will have to pay for 30% of initial costs up to US$25m then 20% thereafter. - Payment of US$1m to Africa Oil when Dharoor spuds
The same terms apply to the Nugaal project except there's no US$1m payment on spudding.
So to earn this interest RMP have paid - AUD$2.8m (CAN$2.5) to get their foot in - US$5m min for each of Dharoor and Nugaal for 10% - US$7.5m min for each of Dharoor and Nugaal for 20% - US$1m on spudding
So for 10% it's cost them US$13.5m and for 20% it's cost them US$18.5m.
Africa Oil have done well to squeeze and extra $10m for drilling costs for two wells. Where does this penny dreadful get there hands on US$20m is the question...
RRS Price at posting:
7.9¢ Sentiment: ST Buy Disclosure: Held