Hey GB,I do agree that this is good news, Bresnahan was (and...

Hey GB,
I do agree that this is good news, Bresnahan was (and importantly still is) a substantial holding cost to DRE, this is part of the reason I’ve been keen to see it divested for some time now.

"Not sure how much the same costs are in the Bresnahan project/area, but whatever they are, Teck will be contributing/reducing DRE's costs by $250k in the first 18 months, $1.25M within 4 years and another $2M over another 4 years."
I don't view it quite the same as that...or at least I don't see it as Teck automatically reducing DRE's costs by x/time1 and x/time2 etc
Sure there are triggers there, whereby if Teck want to get to 80% then yes they've got to jump those hurdles and spend those totals. But none of that is a given. The only committed amount that Teck have is the $250,000 within the first 18 months.
Beyond this initial 18 month period they only need to keep the tenement in good standing (on a pro rata basis)...they would then only be required to spend an additional $1m if THEY elect to proceed to 60% and they've got 4 years to reach that amount, or can stop at any point.

So to me this is a fairly classic Major-to-Junior 'soft earn-in' whereby the figures on paper looks good, and it works for the Junior explorer as there is something to put in an announcement that looks decent, but the reality is the Major isn't really locked in or committed to actually spending those amounts unless THEY decide its worth it.
That said, its common for these type of early stage greenfields projects, your not likely to get a major signed up to locked-in larger committed spends unless there is something they really like from the outset.

What this earn-in does do (imo), as of now, is it takes ~$23.5k in rent and ~$139k in minimum expenditure off the DRE books, desperately needed at the moment, and like you say retains exposure to the upside in the case of Teck having any exploration success (if they push ahead with it properly).
Personally, I’d like to see it continue with the rest of Bresnahan (I hope that’s what DT has indicated re additional deals), because even with this earn-in agreement the Bresnahan project is sitting at ~$483.3k per year of current overheads with an additional ~$661.6k in pending overheads from the other EL-applications that are likely to be live any day.


The small block EL’s, which are getting long in the tooth (+8 years), are really starting to bite…
For example, the minimum expenditure in the first 1-3 years of an EL's life is set at $1000 per block, but this ramps up after the 3rd, 5th, 7th, and 8th year anniversaries, plus then there are presets for EL’s of <20 blocks. So EL52/3462, being a single 1-block EL sitting in its 8th year - this costs DRE $20,000 per year in minimum expenditure alone. Basically, the same as having a 20 block EL in the first 1-3 years…only you would be paying $20k for 62.76 SqKm instead of $20k for 3.138 SqKm.
So there needs to be a decent reason to justify holding older and small EL’s.
Keep in mind that these two small EL’s at Bresnahan also came at a cost to acquire (they were not free ground applications), it was the Hurricane-tenure $50k cash and 2.5million shares…and we’ve never really been told why they are strategic nor prospective other than ‘consolidate ground position’.
This was done during peak-Yin and then the initial HREE pXRF and rock-chip results here at Bresnahan, so I'm assuming it was decided 'lets wrap this place up, just in case'...which is fine, but now its coming at a cost so the more we can reduce the better I think.