Lindian will receive royalties of between US$1.00 and US$2.00 per tonne of bauxite produced from Woula with the Lessees initially targeting an annual average of 2 million tonnes of production paid quarterly. Lindian will transfer the Woula leases to the Lessees after 10 million tonnes of bauxite is produced or after 5 years, whichever comes first.
Lindian’s royalty will be ongoing for as long as bauxite is produced from the tenements.
Under the Lease Agreement, the Lessees have the option to buy-out the royalty, and Lindian’s interest in Woula at any time, by paying Lindian a buy-out price calculated as follows:
• If the buy-out is exercised in Year 1, the buy-out price is US$15 million. • After Year 1 the buy-out price reduces by US$1 million per year until Year 10, where the price is US$6 million. • The buy-out price for Year 11 and for each year after is US$5 million.
Was not expecting this release but seems to be good news that once in production will pay for corporate overheads... seems to be reasonable plus help to provide some cash and partnerships to help develop the other Guinea bauxite assets, along with access to infrastructure through non-utilised port capacity.
LIN Price at posting:
9.3¢ Sentiment: Hold Disclosure: Held
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