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clock Created with Sketch. 09/08/23
20:49
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Originally posted by kervio:
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Royalty mandate also acts as a bit of a disincentive to other future investors because the royalty is with the project now for life of mine or until buyout. So if they were trying to sell the project they will get a lower fee because the profit is affected by the royalty. If they were going to develop the project and needed to fund the capex, effectively there's a higher class of investor who is in line to get paid before anyone else as their money comes off the top line. If margins are slim because the AISC is high compared to whatever the mysterious price of garnet is these days, then there's an extra hurdle of royalty money being paid that's straight off the top line.
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also what is this rubbish about huge capex requirement relative to market cap? Those two things are not directly comparable.
(20min delay)