Net Smelter Fees are a way of negotiating or putting a price on the potential of an asset at the time of sale.  For example, there is a considerable amount of land at Schaft Creek which has enormous potential in addition to what has already been discovered and proven up.  When a buyer purchases the land, they make an offer on what is proven but the buyer will demand consideration for the additional potential of the unproven resources.  

A net smelter fee can be negotiated, say perhaps 2% of the resources produced through the life of the mine.  In this way, the seller is compensated for the potential.