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colquhoun

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26/04/17

11:50

Post #: 24267528
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Originally posted by Maigret1 ↑

@SRV

Of course 15% sounds better than 4%, but could it be you mix royalty-% with project-share-% ?

Let's assume they had given us 15% of the total project, at a POG of 1.250 US$ and maybe 1.000 AISC/oz.

15% of remaining profit margin 250 $/oz would be 37.50 $/oz

4% royalties from 1.250 $/oz = 50 $/oz

A 15% royalties deal would give Birimian 187 $/oz and Randgold & Co only 63 $/oz from 250 $/oz profit margin.

That sounds pretty good, but i doubt you can expect such a result in a negotiation David against Goliath....
And Randgold would get only 40% of 63$/oz.... That would not be worth the effort for Randgold.

In this JV Randgold gave Loncor Resources 35% of the project.

http://www.marketwired.com/press-re...oint-venture-with-randgold-tsx-ln-2089324.htm

Sounds even better in comparison to 15% or 4%.

But Loncor is having only 35% of a project with a feas-study level in their hands. To become a producer and receive Cash Flow, they have to give Randgold a further stake or they have to dillute their marketcap to finance 35% of mining capex on their own...

Not sure if the Loncor shareholder gets more in the bottom line in comparison to a 4% royalty deal...

Expand

Not convinced that Randgold will take up the option. More interested whether these will get exercised. Should know by the end of the week.

4,525,000
Unlisted Options
with an exercise
price of $0.25 and an
expiry date of
27/04/2017

BGS Price at posting: 26.0¢ Sentiment: Hold Disclosure: Held
5 Upvote

0 Great analysis

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