MYG 0.00% 4.6¢ mutiny gold limited

for heraclitus

  1. 816 Posts.
    Hi, sorry i couldn't reply to your post

    I need to thank SimpleSimon for pointing out the 500$ gold is what Sandstorm pays MYG and not 500$ discount of gold price.
    As i posted, MYG is able to get 50m in finance and i did speculate on Sandstorm. Project not being 100% debt financed is also on the spot as there has been 7m in equity being raised for this and the need for goldstream. 2m from the convertible note and 5m from Sandstorm as per todays announcement is the equity raising. I think i will be right again later when they announce a new institutional partner. Simply because the project is financed (50m+43m) but not working capital. Sadly i can't provide EPS as 7m in equity is unknown what price it is done at but i can roughly calculate how much it will cost MYG.

    However how does this deal impact MYG?
    As previously posted this deal is locked in for 36 months and gives an average of 9.5% gold being sold at 500$.

    There is to be 400,000 ounces of gold in 7.5years so that is
    38000oz.

    At 1700$ gold, MYG will forgo 45.6m in future profits (if gold goes higher then more profits forgone) to acquire 43m from Sandstorm. This number is the lowest amount as it requires MYG to pay off Sandstorm at year 3 and does not take into account extra gold being produced as 7.5% will have to be sold at 500$.

    MYG has to repay the gold stream and has to forgo 45.6m minimum so NPV has decreased. Investors are also speculating how they are going to make up for working capital till production in case of cost-overruns. This probably explains why SP hasn't surged 30% today.

 
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