Loading ...How about that silver stream agreement with WPM. Effectively taking away 25% of production for NOTHING, ZERO with $Silver at or above 25 USD.
I wonder why no one seems to care.
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https://www.wheatonpm.com/streams/other/default.aspx
“On October 2, 2008, Wheaton Precious Metals entered into a silver purchase agreement with Alexco to purchase 25% of the life of mine payable silver produced from the Keno Hill district for an upfront cash payment of US$50 million plus a payment equal to the lesser of US$3.90 (subject to an inflationary adjustment starting in year four after the achievement of specific operating targets) and the prevailing market price per ounce of delivered silver.
On March 29, 2017, the Company and Alexco agreed to amend the Alexco silver purchase agreement to adjust the silver production payment so that it will be a percentage of the spot silver price that increases with lower mill silver head grades and lower silver prices, and decreases with higher mill silver head grades and higher silver prices, subject to certain ceiling and floor grades and prices. In addition, the outside completion date was extended to December 31, 2019. As consideration, Alexco issued three million common shares of Alexco to Wheaton Precious Metals. The area of interest for the Alexco silver purchase agreement includes properties currently owned by Alexco and properties acquired by Alexco in the future which fall within a one kilometre radius of existing Alexco holdings in the Keno Hill district.”
Don´t know where I found this illustration:
You see? They do no longer kill the miner after the amendment… by paying more when POS falls, or grades fall… but from Silver@25 USD/Oz they pay NOTHING for a 25% share of the silver production.
AXU will have to be live with only 75% of its production revenues indefinitely, with POS above 25 USD.
And nobody cares??? Who in the world would ever accept something that cripples profitability as much as the equivalent of a Royalty climbing to 25%? Ain´t that unheard of?
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And there´s more in the fine print:
” The area of interest for the Alexco silver purchase agreement includes properties currently owned by Alexco and properties acquired by Alexco in the future which fall within a one kilometre radius of existing Alexco holdings in the Keno Hill district.”
The Stream as described above would even cover a part of MMG property. Just in case AXU would buy it. Like in “There´s no escape”. Almost, at least.
And this one, repeated from above:
In addition, the outside completion date was extended to December 31, 2019.
Who knows what the contractual terms are if AXU does not manage to do so???
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Duh.
WPM looks predatory to me. Same with San Dimas, but here Mr. Neumeyer renegotiated the agreement. Not so with AXU. They lost.
Tell me if I got something wrong, please.