Rye Patch Gold (RPM.V) has announced it has filed a demand for arbitration against Coeur Mining (CDE, CDM.TO) with respect to the royalty payment made by Coeur to Rye Patch on the gold and silver production from the first quarter of 2014.
After PriceWaterhouse Coopers performed an audit on the calculated royalty payment to be made by Coeur, there seemed to have been a discrepancy of $313,000. The potential explanation for this is the fact Coeur sold a batch of gold and silver with a total value of $9.2M in January of 2014, although it seems to have been produced in 2013. The outcome of this arbitration procedure will be interesting, as in the original press releases announcing the 3.4% NSR on the gold and silver production from the Rochester mine, Rye Patch said the NSR will be due on all gold and silver ‘produced and sold’ from January 1 2014 on, and it looks like Coeur is trying to make people believe the revenue was reported against a production in the previous year.
If the precious metals were indeed produced in January 2014, Rye Patch seems to have a very strong case although we would have hoped Coeur would be playing by the rules by now.
Disclosure: The author holds a long position in Rye Patch Gold. Rye Patch also is a sponsor of the website. Please see our disclaimer for current positions.