Hello Silver,
As I understand it (perhaps I am totally wrong on this), the 5% royalty only applies to the portion of the Godex mine under the JV. The rest of the deposit belongs to AEM hence not subject to the 5% royalty. As an aside, presumably, AEM has an option to assume the 20,320+ oz production and just pay the additional 4M (in cash or shares) at anytime, then PRB would have zero interest/share in Goldex...but walk away with $18M in the pocket.
Care to fill us in what your inperpretation is, e.g. what remaining portion did you have in mind.
Just to follow up on LT/Mark's post, I took the liberty to add the numbers together and offer some comments.
27M current cash + 18M for the 5% royalty just sold + another $18 M options (after 8 November 2013) = $ 63M. If one is not patient enough to wait until November then subtract $0.8M (say $1M to be on the conservative side) to have $62M in the kitty after 21 April 2013. However, the first two groups of warrants are currently in the money so there would be no impediment if the holders want to exercise them now (assuming 21 April 2013 is simply just the plain expiry date, with no other conditions attached).
$62M is quite a cool sum of cash which would be handly for additional drilling and other activities.
My guess would be within a year, the resource at BL would get from the current 5.6 Moz to the 10M oz level. Let's see, 10 MozAuEq x $50/oz = $500M/75M shares = $6.7/s. (ignoring the value of BC, etc)
Take you pick if you don't like the assumption of $50/oz, taking into account the potential of POG increas and how badly a suitor would want to scoop up a 10M oz plus deposit. We want to see a bidding war, but not now.
"Patience young grasshopper", Master Po says.
goldhunter
