HI HIO,Watching the grass grow while waiting for some news is...

HI HIO,

Watching the grass grow while waiting for some news is boring.

Thanks for the heads up on DRR, it looks like the lions share of their royalties come from BHP.

Having not put much thought into investing in Royalties they are an interesting option.
Nowhere near as safe as cash but more secure that ordinary equity.

I was interested to see what approximate copper price would be necessary to repay the debt and interest out of the first 85Kt of copper produced if processing 1.5m tpa.

It seems on my calculations which involve some off the top of the head assumptions that at a cu price of $2.30 the debt and interest would get repaid but there would be nothing left for royalties.

At S2.50 the royalties get paid in full.

At $3.00 there is 16% of copper revenues going to free cash flow for shareholders. Given that shareholders have at market value of the shares 7x what freepoint have in vested in the 2.5% royalty at $3 shareholders are doing as well as Freepoint.

At $3.80 shareholders do twice as well

At $6 they do three times as well. Given that Freepoint would get circa $40m out of the first 85kt shareholders will be doing extremely well
Of course after the first 85 Kt Freepoint drop to 0.5% of the rest of the copper that comes out of the mining lease. It could be quite a significant quantity given the Resources already booked from the limited drilling to date.

There is also a lot of resources outside the mining lease that shareholders are in with a chance on.

I think I'll stick with the high risk equity and hope for really happy days.