Under the purchase agreement with L&M Holdings, BRL is required to make a US$40 million payment once 25Kt of saleable coal has been shipped and then a second US$40 million payment when shipments have exceeded 1mt. The terms of the sale agreement provide the option for Bathurst to defer these payments. If Bathurst opts to defer either payment, the 5% royalty payable would at that point lift to 10% until the US$80 million is paid. Once the $80 million is paid, royalties to L&M drop to the 1.75% LOM level.
Ann: Claim against BRL, page-16
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