In addition to STB I hold a position in Nevsun Resources (NYSE...

In addition to STB I hold a position in Nevsun Resources (NYSE AMEX:NSU)

At least for NSU's Bisha mine, The State of Eritrea has a free carried 10% interest plus an additional 30% paid participating interest for a total of 40% interest in Bisha. The interest will be paid over time, out of Bisha cash distributions (i.e. after tax). With the price of gold where it is, this will be paid out in over the next 2 years.

In NSU's case, the purchase price determination was subject to a process involving two independent international institutions that were mutually appointed by Nevsun and Enamco in January 2011. It should be noted that the purchase price is not indicative of the fair market value of Bisha but rather the outcome of a price determination process, defined in a 2007 shareholder agreement, based on parameters of the Bisha deposit as it was understood in 2007.

Just by way of example Enamco is paying US$253M for that 30% of the Bisha deposit.

So one would expect it to be similar for STB when the time comes. I would not expect to see contribution to Capex - that is if it is the same as NSU - 10% free carried and 30% option to buy after first gold produced. Maybe their deal was negotiated differently.

Also from NSU is this ranking from Resource Stocks World Risk Survey 2011. I happen to think that the level of sovereign risk to Eritrea is not as bad as some make out.

Needless to say, took up my rights issue shares.