When you sell an asset, particularly a non-producing lease the legally drafted sale agreement can often include a royalty being a percentage of the revenue. That leaves the seller an interest in the asset which makes particular sense if the underlying commodity price goes up making it economic in the future.
One example is ILUKA resources had iron ore leases in, Mining Area C, I think. They sold it to One of the iron ore majors with a royalty. Subsequently, 20 years later the iron ore became economic and with millions of tonnes mined at a high price, valuable. In that case, the iron ore royalty was a few years ago, spun out in Diterra as an iron ore royalty-funded company.
RRL Price at posting:
$1.97 Sentiment: Hold Disclosure: Held
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