I believe CHM attempted in early last year for share awap deal with FNC. It could be the second time to negotiate a deal between CHM and FNC.
CHM Share Structure as of March 12, 2012
| Share Structure |
| Shares Issued |
104.5 M |
| Warrants |
5.9 M |
| Options |
12 M |
| Property Option Payment |
0.15 M |
| Fully Diluted |
122.55 M |
Includes 15 M bought deal closed as of March 12, 2012.
x / (122.55 + x) = 0.175 / 0.825 X= 33 M
Based the above share structure, FNC should get close to 33 million shares (but less) of CHM to maintain 17.5% interest in 18 Fermont properties of CHM as CHM also owns ATTIKAMAGEN and POWDERHORN properties. Also it is of paramount importance to ensure to put the dilution limit on future share issuance by CHM.
Further FNC holds 1.5% NSR that was not count in the above calculation.
1.5% NSR royalty, buyback on .5% for $1.5 M
Most royalties include more deductions: the costs of building the mine and infrastructure, the cost of exploring to find the deposit, the cost of repaying the loans needed for construction, and so on. Most examples of an NSR, on the other hand, either don't take those "sunk costs" into account, or have a limit on how much of them can be used as deductions. The advantage of an NSR is that while it can pay less than a royalty, it starts generating income immediately.
