@财经啄木鸟@额滴娘 Royalties are ongoing economic interests in the production or future production from a property and, depending on their terms and the laws applicable to the royalty and the project. The two most common royalty types are: Revenue-based Royalties are based on the value of the production or net proceeds received by the operator with defined deductions as specified by the royalties contract. Some forms of revenue-based royalties in the mining and oil & gas industries are: NSR, Net Smelter Return Royalty ORR, Overriding royalty GR, Gross Royalty FH, Freehold or lessor royalty Profit-based Interest Royalties are based on the operating profit as defined in the royalty contract. Often, royalty payments only begin after the operator has recovered its captial costs. The net profits interest royalty NPI is the most common form of these royalties. Similar to an NPI, a net royalty interest NRI is paid net of operating and capital costs. Working Interest WI holders have an ownership position in the property and operation and hence are liable for cash calls on their share of capital, operating adn environmental cost ususally in proportion to their ownership percentage. Working interests are not considered to be royalties because of their ongoing funding requirements although, for profitable operations, they can be economically similar in ther calculations to NPIs. Streams are metal purchase agreements that provide, in exchange for upfront deposit, the right to purchase all or a portion of one or more metals produced from a mine at a present price. Streams are not royalties because they are not an interests in land and there is an ongoing cash payment required to purchase the physical metal.
stream financing, also known as resource streaming or metal purchase agreements, is becoming increasingly popular in the resource sector. Stream financing can be used to help bring a development stage project into production or to expand existing production acpacity of an operation mine. It provides an alternative way of raising capital for a project at a time when market conditions make equity financings very dilutive adn debt financing difficult and expensiveto obtain. stream financing can be in respect of either primary or secondary products adn can be used for either precious or base metals. In a typical metals stream financing, a streaming company makes an upfront payment to a resource company in return for the right to purchase a fixed percentage of future production of one or more metals produced by a project, and makes on-going payments for each unit of metal delivered under the streaming agreement. Streaming transactions are generally long term in nature adn are often for the life-of-mine.
In addition to the upfront payment, the streaming company also makes an additional payment, on delivery, for each unit of metal purchased under a streaming agreement. The streaming company will pay up to the fixed price in cash and, if the market price of the metla is higher than the fixed price, the upfront payment or deposit is amortized through the difference between the fixed price and the market price. when the market price for the metal is low, the upfront payment will be reduced more slowly and may never be reduced to nil. If the upfront payment has not been reduced to nil by the end of the term of the agreement, the resource company may be required to pay an amount equal to the remaining balance to the streaming company. NSR vs. Stream vs. NPI A comparable percentage NSR is more than three times more valuable than an equivalent developed NPI or WI and 50% more valuable than a stream interest. With changes to the gold price, the NPI or WI would demonstrate the most leverage while the NSR would provide the most down side protection. The stream provides commondity price leverage similar to a low cost operationg company with more certainty as to future costs.