"Pawned off a royalty haha. So u disagree with Osisko valuing...

"Pawned off a royalty haha. So u disagree with Osisko valuing Hch at just under $2bn?? I have a feeling u may go missing now…."

A 1% royalty for $15m doesn't value the company at $2bn.

You can value the project by looking at what rate of royalty would kill the project relative to the stream that Osisko have bought. Given that the IRR is already 21% which is borderline, a 10% royalty would easily make make the project sub-economic (defined as IRR lower than the cost of capital keeping in mind that the real cost of capital is around 12-14%, not the 8% used in the PEA). Osisko took a 1% royalty for $15m. Assuming a 10% royalty is the full value of the project, the project is worth ~US$150m (10 times $15m).

However it gets worse because you confuse equity value with project value.

HCH will need to raise capital (probably >US$300m) which will be dilute equity holders but not Osisko's royalty stream. So the equity today must be valued much lower than the project value to account for future dilution.

The royalty says a lot about the chances of the project going ahead any time soon. Osisko paid $15m. The royalty will pay Osisko about $10m per year when in operation at current copper prices. This seem generous to Osisko and very onerous to HCH, but Osisko are taking a big risk because the project is not assured of going into production and when in production, it is not assured of success because it is low grade project.

Now you say look at the mined grades around the world which are in line with HCH. But what you ignore is that none of those projects started with such low grades. Projects only get started on high grades. High grades are required to pay of the capital, then projects can continue to operate using the sunk capital to treat lower grades right down to the marginal OPEX cost of production.