Streaming Agreement

Of course, such restrictions are stricter on the part of the operator, as a change of control can result in a reorganization process that would ultimately impact the decision to continue the mining operation subject to the streaming agreement. Consequently, a change of control of the operator would not be permitted, unless the operator agrees that its obligations under the streaming contract remain in full force despite the change of control or the operator`s obligations under the contract are assumed or, at the very least, guaranteed by a third party for the benefit of the buyer. in this case, the operator is exempted from his obligations. When it comes to streaming deals, the main problem is that the mining company accidentally underestimates the streaming product and therefore does not benefit from a subsequent increase in its market value. If the mining company is unable to negotiate optional buybacks to purchase all or some of the electricity, the investor can get a considerable windfall without having to compensate the mining company for this benefit. This problem can be widespread when the market for the diffused product is particularly volatile. In certain circumstances, such as for example. B failure to meet production targets, insolvency or other late events, the operator is required to reimburse the buyer for the uncredited amount of the acompt; If this repayment obligation is not properly structured, the streaming agreement can be referred to as a non-traditional debt instrument for credit rating purposes. In this context, for example, the credit rating agency concerned may take into account whether the repayment of the guarantor includes the payment of accrued interest on the uncredited amount of the contribution or whether the securities granted by the operator to the buyer outweigh those granted to other lenders and creditors4 at the beginning of 2015, KBL Mining Limited has entered into a streaming agreement with Quintana Mineral Hill Streaming Co. LLC.

intana agreed to provide KBL with $23 million in installments, in exchange for the right to purchase a percentage of KBL`s base metal, gold and silver production. The current monthly payments to the mining company, which must be paid when the specific metal is delivered, as well as the obligation on the mining company not to return deposits credited to the streaming company at the end of the streaming contract, incentivize the mining company to continue producing, dethough it has sold some of its shares. Since the mining company provides a percentage of the actual future metal production, metal supply agreements are structured in such a way that mining companies are not tied to the production of a certain minimum amount of metal on a given date or to the repayment of a fixed amount at certain maturities (as would be the case in the case of a typical debt transaction). This means that the low tide and the tide of the mining company are automatically taken into account in the production process. Similarly, the buyer may benefit from a right of pre-emption that can be exercised if the operator receives from a third party an offer to purchase available quantities of metal for streaming, as well as an initial purchase right with regard to the additional quantities of streaming metal that the operator wishes to sell, allowing the buyer to increase the amount of streaming metal supply without any significant difference from the fixed price already agreed. . . .