1/ The story of #CoralGold $CLH.V sale of the Robertson project to @BarrickGold is very interesting. CEO David Wolfin describes the details in 2016 interview with Jay Taylor that I found very helpful:
2/ The key consideration for Barrick's business development committee is the IRR against a baseline gold price. When negotiating the sale of the Robertson, Barrick needed the project to meet a 15% IRR at $1,250 gold.
3/ In the 2016 interview with Jay Taylor, Mr. Wolfin describes how he negotiated for the royalty to be set as high as possible at $1,250 gold and then to increase with each $200/ounce increase in the gold price up to a maximum 2.25% NSR.
4/ This was a win-win that allowed the committee to sign-off on a deal that passed the hurdle rate at the baseline price, but also allowed Coral Gold to keep some excitement.
5/ With the geological upside and local infrastructure to get Robertson into production, this could be a company maker for Coral. And soon!
6/ A key issue for investors in Coral Gold is what kind of information we can expect about the Robertson now that it's inside Barrick. I am confident the necessary funding is there, but uncertain if it is a priority.
7/ Although we can expect less timely information about the Robertson from Barrick because they have so much else going on, Mr. Wolfin noted in 2016 that Barrick will start covering the Robertson in their quarterly MD&As. Coral Gold reports that Barrick working on...
8/ ...Pre-feasibility, Plan of Operation, EIS simultaneously, which is encouraging. Furthermore, the deal with Barrick provides Coral an annual payment starting in five years if the mine is not producing and that should give some encouragement for the patient speculator.
9/ Mr. Wolfin also mentioned that Barrick is putting an award-winning exploration team in charge of the Robertson. That is, the team who found the Goldrush deposit, which has 15-million ounces of gold nearby the Robertson in the Crescent Valley.
10/ This team won the Thayer Lindsley award in 2014 from @thePDAC: barrickbeyondborders.com/mining/2014/03… and
11/ What happens if Barrick starts drilling the Robertson in earnest -- could they double the total resources to five million ounces? At that point, royalty companies like Franco-Nevada or Royal Gold would surely take notice. The value of this royalty to them could be greater...
12/ ...than the enterprise value of Coral Gold itself!
13/ After Coral sold the Robertson to Barrick, they were able to cancel 4+ million shares. That is approximately 8.7% of all shares outstanding for Coral Gold. They have also implemented a buy-back program in 2017. The shares are tight and getting tighter all the time.
