Ann: $6m Funding Agreement For The Sale of Kanmantoo Royalty, page-43

Hi all

Interesting development today and we shall see how it plays out.

If I'm right in my calculations, HGO will need to derive income of $240m in order for Freepoint to earn its $6m. That seems to me to be a massive vote of confidence from Freepoint that HGO will deliver a significant project and, if so, will be great news for shareholders.

If HGO makes nothing from the project (or something less than $240m) then Freepoint won't get all its funds back which is very different to a loan arrangement. The downside is an ongoing potential future return for Freepoint if the project continues to deliver value for shareholders but that seems a reasoanble swap in the circumstances given the potential upside for shareholders as noted by Veritas.

To my mind, HGO has effectively raised capital at a significant premium to today's current value.

I'm sure the reality is that funding has dried up for many parties (not just HGO) in the current market given the risk appetite of lenders has fallen considerably, coupled with the recent copper price falls (temporary in my view). Perhaps management could explain this better but it seems like a pretty good outcome to me.