Eurasian Minerals (EMX.V, NYSEMKT:EMXX) has announced it has signed an agreement with Kennecott Exploration (a subsidiary of Rio Tinto (RIO) ) whereby the latter can earn a 100% interest in the property by making a $1.15M cash payment to Eurasian (spread over five years), as well as incurring $5.5M in exploration expenses within five years.
Once Kennecott will have earned its 100% stake, Eurasian will receive a 2% NSR on the property, of which 1% could be repurchased by Kennecott for a $4M payment. What’s even more interesting is that Kennecott will have to start pre-paying the royalty at a rate of $125,000 per year, increasing to $200,000 per year after the completion of a PEA and Kennecott can only stop making those payments if it wires $4M in cash to Eurasian. On top of that, Eurasian will be entitled to milestone payments and the company can look forward to $500,000 when a PEA is completed, $1M for a pre-feasibility study and an additional $2.5M when a feasibility study will have been completed (but the $2.5M will be credited towards future royalty payments on the 2% NSR).
> Click here to go to Eurasian’s website
Disclosure: The author holds no position in Eurasian. Please see our disclaimer for current positions.
