New reserve estimate from AJM this morning is likely to deliver revenues of about $32M more to AGO over life of the mine.
Revenues (not discounted to present value) will bring in $184M approx now or about 2c per share. The discount rate would be far less than the standard 10% as capital blowouts, increase in operating costs etc will have no impact on the size of royalties received.
The royalties however may be higher or lower depending on the performance of lithium price in the future. USD 690 was the price used by AJM.
I used 3.5% weighted royalties (other than state) as per the announcement this morning.
It should be noted that the present value of potential lithium royalties are not included in the Balance Sheet yet this is going to be another future economic benefit for AGO that MIN will take off our hands for the total sum of $0.
When I calculated the consolidated equity of the new entity of which AGO will contribute $800M or 40% of total equity, none of this included likely lithium royalties...
AGO Price at posting:
3.1¢ Sentiment: Buy Disclosure: Held
