The whole Buckreef project ignores the previous business model and intent of TNX. First JS told shareholders that he would explore. He wasn't going to make the mistake of buying. So what did he turn around and do, he bought Buckreef. Second, TNX was going to work on the royalty model whereby other miners would commit the capital to build the projects and TNX would collect the royalties. It wasn't supposed to to matter if the cost of production changed TNX was going to collect the royalties and be profitable no matter what. Now TNX is going to build a mine and produce gold. Finally, JS told shareholders that 100 million was the ceiling for shares outstanding. The count is already above that plus about 5 million to be issued at $6.25 upon exercise of the warrants.

Now lets revie the math part. TNX needs the money before production, so the production has to come from somewhere else. TNX has stopped work at all other sites to focus on Buckreef. It will be tough to produce any gold where no one is working. Zero oz. x $1,700/oz. = $0 Also, in your calculation, you use the market price of gold and completely ignore the not insignificant cost to produce that gold. It is not like there are gold bars buried under ground that just need to be dug up with a shovel. So more like Zero oz. x $500/oz still equals zero.

STAMICO is not the entity that grants the licenses. The government of Tanzania is not going to give away the licenses for nothing. If the Buckreef project is expanded, TNX will have to pay for those licenses. If Tanzania didn't need money for developement they would have never brought in foreign partners. To summarize, your logic is that TNX will be given licenses for an unexploited cheap and easy to mine gold source. Using that gift, TNX will be able to pay for Buckreef. The government of Tanzania must really like James Sinclair to just bestow that much wealth upon the shareholders of his company. The guys at STAMICO must be hopping mad since they could have just mined the surface gravels and redeveloped Buckreef all by themselves. After all they are supplying the labor, some of the equipment and the mining expertise as part of the JV.

The money is not coming from nickel production. TNX hasn't even announced if Jichuan has made a production decision let alone when production will begin on Kabanga. Lets do that math Nickel price of $12/lb *3% royalty = $0.36/lb $250 million/$0.36/lb = 347,222 tons of nickel. Current production = zero. It took Barrick two years to put their project at Kabanga into production so I don't there will be any royalties from Jichuan before 2014.