As a minimum the deal must have a trailing royalty attached to it. You can set a maxmimum rate of Au to be produced at a % or do it for the entire LOM to get the deal over the line. This only becomes payable if the companies can get the mine up and operational so there isn't a cost to them at this stage....
Metrics on a $/oz basis are poor.....
We have to remember LCL paid $7m for the assets and issued 350M shares at $0.005/share or $1.75m in 2016 when the gold price was only $1250/oz...So virtually a $9m purchase price to only get an extra $1m if lucky in this deal with TGC... There is no value creation by LCL management only one Director holds shares in the company directly. The rest only have performance rights to acquire shares if they perform so I don;t think they are in a position to recommend what is best/right for shareholders......
LCL Grew the resource to 2.6M oz from 1.88Moz and is getting less for the asset than what it paid for it in a record gold price environment. what a steal for TGC at these prices....
LCL Price at posting:
0.9¢ Sentiment: Buy Disclosure: Held
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