Not terribly enthused about the Rambler deal.
If I am reading this right, Sandstorm is providing them with $20 million in capital.
These payback terms are only attractive with a substantially higher gold price.
Sandstorm will be entitled to 25% of the Ming mine’s first 175,000 ounces of payable gold, and 12% of all payable gold thereafter. Initially the agreement will last for 40 years and Sandstorm has the right to renew the deal for successive 10 year periods thereafter.
The final feasibility study of the project confirmed an initial 6-year mine life at 630 tonnes per day with an average annual production of 7.7 million lbs of copper, 11,600 ounces of gold and 42,600 ounces of silver. Production is targeted in Q2 2011.
Total production for the 6 year mine life is expected to be at 46.24 Mlbs (million pounds) of copper, 69,468 ounces of gold and 255,388 ounces of silver.
I think this says they, SSL, are in line for around 17,500 ounces of gold in the first 6 years.
That is around break even in 6 years at current prices.
Any profit, which would have to come from the additional 100,000 ounces would be in the outlying years.
Doesn't strike me as a kick ass deal. |
