For those that are unaware, CWE receives a quarterly royalties...

For those that are unaware, CWE receives a quarterly royalties payment from MLX.  This goes back to the days when Carnegie was a gold explorer.  The founder of Carnegie, Alan Burn, had a royalty legacy attached to the sale of the gold operation.  It was originally tied to the Trident mine, part of MLXs Higginsville Operation (HGO)in WA.

The original agreement had royalties kicking in when the gold price was above $600/oz.  That arrangement was unworkable as prices had risen by so much, it would not have been commercially worth it for MLX to mine Trident.

A new agreement was renegotiated whereby the participation rate was lifted to $1340 AUD but all of the tenements in the Higginsville Operation where included.

It appears that the Trident tenement is less productive now but other HGO tenements are improving.

From what I can tell, the renegotiated terms are working out well on two fronts:

1. The gold price is going up

2. The life of the royalties payment will last longer as falling production at Trident is replaced by increasing production from the other HGO tenements.

The amount of royalties we have been receiving is somewhere in the vicinity of $1.2 million AUD per year.  It would be good to see the gold price continue to rise to the maximum participation rate of $1900 AUD and for production for the whole of the HGO to continue to improve as well.


"The new royalty structure agreed between the parties is:

• The NSR has been lowered from 4% to 1.75% and its footprint has been expanded to all current tenements at the HGO.
  
  
• The starting level for price participation has been lifted from A$600 per ounce to A$1340 per ounce with an initial level of 12.5%, with an escalating participation from A$1500 to A$1900 per ounce."
  
  http://hotcopper.com.au/documentdow...SSY5ADQpmakakwQNMijB+bN5McISqotnLB4s0yeEjZA==
  
  http://www.globalminingobserver.com/royalty-freak-out-137-4/