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Royalty Mining Advantage
As Golden Phoenix expands its base of operation, the Company expects
to develop several of its properties into Royalty Mining projects.
Golden Phoenix plans to target advanced stage projects with near-term
production throughout North and South America. The Company
anticipates analyzing up to 50 prospective properties, with a view towards
optioning up to 10 of those properties on terms and conditions acceptable
to the Company. From these optioned properties, the Company hopes to
identify up to 5 projects that can be advanced toward commercial
production.
Golden Phoenix expects to retain up to a 30% interest in each project.
The Company anticipates its cash flow will be leveraged to the price of
gold or the underlying strategic metal. Ultimately, the Company intends to
convert some of its interests into Royalty agreements. The strategy is
called “Royalty Mining in the Americas.”
When we acquire a property, our objective is to add value by providing
financial and geological expertise in areas that include:
•
Introductions to sources of investment capital.
•
Geological support to target additional exploration.
•
Drilling support to confirm additional discoveries.
•
Expertise in permitting, bonding, legal and accounting issues.
•
Introductions to mine operators who can potentially take these
projects into commercial production.
Golden Phoenix anticipates that the managing partner on each property it
acquires will carry all finance costs to bring the project into commercial
production. This is unique in the mining industry because junior partners
are often responsible for paying their share of the costs associated with
bringing a project into production. This can delay, in some cases for
years, any payments received by a junior partner once a project achieves
commercial production.
Our strategy has the potential to eliminate this delay. The value we add to
a project before we secure a mine operator will represent a significant
portion of our contribution to the joint venture. This value is intended to
prepay our share of the startup costs and provide access to immediate
cash flow upon production.
When a project achieves commercial production, Golden Phoenix expects
to receive royalty payments leveraged to the price gold or the underlying
strategic metal. Royalty payments are anticipated to continue for a
specified period of time or until the Company sells its interest in that
project at a price it anticipates will be a premium to what the Company
has invested in the project.
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