re: Ann: Royalty Restructure at Higginsville ...
fitnfam
imo that's a very negative take on the renegotiated royalty deal!
true that the details of the sliding scale were not explained. and yes, as per my post above, the % royalty will increase with higher gold prices. but there had to be something attractive for both parties in order to agree to a new deal. mlx have prudently done a deal which will significantly reduce the royalty at current (or lower) gold prices and will forgo SOME of the (potential) super-profits if the gold prices rises significantly.
you can bet that the deal is such that if we have higher gold prices mlx will also be making much more coin despite paying a proportionately higher royalty. it's like a progressive income tax rate system. would you rather earn a gross salary of $50K and pay $8K tax (16%) or earn $200K and pay $65K tax (32%).
your noose analogy would suggest the person on $200K will struggle more than the person on $50K because they're in a higher tax bracket!
imo, the ex-alacer gold operations look to have been a fantastic acquisition, having been fully paid off in less than 6 months (and under the previous higher royalty regime!) which is lucky because mlx is currently making SFA from tin ...
MLX Price at posting:
20.0¢ Sentiment: LT Buy Disclosure: Held
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