Ann: Call Option Deed for Royalty Buyback and Settlement Deeds, page-9

@Linway It is quite likely that BTR will manage to get some deposits into production. Based on their resources and the revenue potential one could take a view that they should not be capped at only $13M. They have some deposits that can be mined as open-pits initially and most importantly they have a plant that can be upgraded and refurbished for the relatively low cost of $5.5M. This is the problem that many smaller players face. They do not have plants and also struggle to do toll-treat deals with plant owners as those owners are currently mostly running at full capacity processing their own ore. BTR has had a tough history as well so the market must be somewhat sceptical still.

You are correct in that the royalty only gets paid as they produce. If they stop mining they pay nothing and have no obligation to mine either. My point was really around the US$25M and surprise that they were not able to negotiate a substantially lower number based on the existing ore resource, risks etc. Unless they add substantial new resources or the gold price goes up significantly over the next few years it is likely that they will not exercise the option and then would have incurred only the option cost. Not a terrible outcome but would have been so much better if there was a reasonable probability of actually hitting the cap.

It is extremely difficult to work out which of the juniors to back as there is so much inflated information published in quarterly reports. If you plan on investing in the junior end of town and have no geological background it might be useful to brush up a bit on this. Geologists for instance can quickly spot if a junior is pumping a project with very little technical merit.

I would rate BTR as having a more than fair chance of becoming a producer. They have the resource, a plant, by the looks of it capable management; so it comes down to whether they can raise the required capital and execute.