The royalty gets paid as long as the mine is producing . It is not directly related to that production being profitable or the amount of free cash flow it prduces . It will also just sit in place if a mine start up takes a long time to eventuate.
It is just a fact of life that getting into production requires making financial arrangements that are high cost . I agree that it is a better option than a credit raise at current prices but it does not guarantee that there will not be one as a requirement of a loan to get to first revenue but imo makes one less likely.
At least something is happening and hopefully FID is not far away and this deal is only just part of a larger funding arrangement to get mining started without further equity capital being raised.
HGO Price at posting:
4.5¢ Sentiment: None Disclosure: Held
