Sometimes a goldie will invest in another goldie but that is completely different from obtaining a share in a producing mine under a JV arrangement. If they invest in another company then they are just another shareholder and have tied their coat-tails to that company and its management. Unless they are a majority shareholder then they can not include the profits/losses from the company in their own accounts but can only receive dividends (if any). They will account for capital gains or loss thereof, of course. If they buy into a JV, like RRL has done, then they receive their percentage of gold sales as part of their own revenue and can include their share of reserves and resources in their own resources, as well as take their share of expenses. The JV is a form of partnership in other words. I think this is how it works but am ready to be corrected, if I have it wrong.
RRL Price at posting:
$2.54 Sentiment: None Disclosure: Held
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