I'd personally call it a GSR although an NSR and GSR can, apparently, be the same thing. An NSR is usually a % of (rev - production costs) but an NSR could be defined as:Net Smelter Return Royalties: a % of the gross value of production. What matters are the specifics, and Paul already said it is a gross deal so we already know the answer to your question regardless of what terminology we use.
According to a Mexican royalty company:
NSR:Generate revenues by being paid a small percentage (typically 1-4%) of the gross value of the products.
The favorable attributes to an NSR:
Insulation from increases in operational costs.
No construction, environmental or closure costs.
Limited management-time administering asset.
The negative aspects to a NSR:
High acquisition costs.
Difficulty in acquiring a royalty that significantly enhances earnings per share.
No influence on production decisions.
Note how the traditional negatives do not apply to Mexus' deal.
Even if it is a traditional NSR (rev - production costs) since:
All mining operations will be funded by Argonaut at no cost to Mexus.
The equation would be 20%(revenue - zero) or 20% of revenue.
Call it an NSR or a GSR or an NSR with no production cost, whatever makes you happy. Paul Thompson said it is a gross deal so this means that is a gross deal.
I know it is kind of ingrained in everyone to be negative and it is prudent to have questions but sometimes awesome news is just awesome news. This is one of the reasons that bear markets exist - we get tunnel vision and are influenced by our immediate pasts. We get the best news ever and just look at how angry, disappointed, and depressed a lot of people were. It will be opposite in the bull, we will get bad news and nearly everyone will be foolishly optimistic. Market psychology is comical as long as you aren't a member of the mob. Everyone on this board is well ahead of the curve but we are still human.
This is a historic mining agreement. This is the kind of venture that can turn a bear market into a bull. People should be raising a toast and celebrating instead of obsessing over questions we already know the answer to. I know that tonight I'll be raising a glass for Mexus, for Paul Thompson, and for everyone else, shareholders included, that put blood, sweat, and probably a few tears into the project and got it to where it is today.
There is still a few unanswered questions but work is progressing and those answers will come eventually and when they do I think we will like 'em.
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