Chico; This is a LOI that requires a later definitive agreement. Highlights;
Search is trading 15 million shares to purchase a 2.5
NSR ("Net Smelter Royalty") held by B&A Minerals Limited. They are transferring licenses on several mining properties. (B & A retains the right to explore for Gems?? on one? Garnet? Diamond?)
"Also, for greater certainty, the 2009 Mining Option Agreement between B&A and Search will, once the definitive agreement is signed, be fully discharged without any further existing or future contractual obligations."
I don't know the details of this, but removing obligations and creating certainty is good for a business. It would make a company a more attractive take over or buyout prospect. (The USA REE Collaboration agreement?)
"Greg Andrews, President and CEO states: “We believe the reduction of the Royalty, will provide flexibility with our future discussions regarding offtake agreements and funding for the projects."
B&A will still benefit with .5% NSR Royalty and as shareholder of 15 million shares.
Share dilution is being traded for a greater percentage of the profits from the marketable product (Assuming the NSR = the marketable product.)
For shareholders the profits will be reflected in a higher S/P or larger dividend. (Mining companies do not like to issue dividends from what I can see!) The SP was down to $.13 US on close, but it is back up to $.1404 US a 6% rise. Lets hope it continues!
