ck_0311...."Jim, that is my original issue! 27 million versus billions? I am an engineer by trade and we are talking 2-3 significant figures here; doesn't that ring a bell anywhere with nothing out of the ground?"
I am not sure what you mean. Yes, 27 million vs. billions. That's how the mining business is as you should well know in owning a few mining claims yourself. That 27 million is not a static figure, merely an estimate now. Since it is a royalty, it could be less based upon what comes out of the ground. It could be a lot more also if SRSR is successful, as most of us think, in proving up more than 188 million lbs.
The point is at the time of the sale, SRSR was dealing with a property with NO NI43-101 COMPLIANT RESERVES. As clip25 so frequently points out to the minions, the stock price reflects the true worth of ther property. Without proven reserves, the market isn't giving a hoot for this piece of potential. Under these circumstances, why do you think the deal SRSR struck with the land is so cheap? They are buying a piece of Nothern Canadian wilderness property that "might" have a large amount of niobium. Where is the NI43-101? At what cost will it take to prove up reserves on the property? Where is the pre and feasibility study and at what cost will that be? How does anyone know that the deposit, even if as big or larger than anticipated, will be profitable to mine?
Who is taking the risk here? Not those that sold the property. They may get anywhere from 27 million to over 50 million if all goes well, but if it doesn't, those that sold got $348,000 for 1800 acres of wilderness - that's $193 an acre for undeveloped wilderness land. I don't see a down side for the sellers.
Also, you might want to check out some other minig deals in this category. I think that you will see it is fairly standard at the level of deposit certainty.....Hope this helps...Jim
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