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Commodity Streaming Agreement

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 streaming metal, as well as an initial purchase right for 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. The operator, for its part, will be reluctant to grant an initial offer right, given the long-term duration of the contract and unpredictable fluctuations in the market price and production costs. For this reason, investors should consider gold streaming companies like Franco-Nevada, Wheaton, and Royal Gold. Streamers` costs are limited to their initial investment, they avoid mining (and associated risks), they have highly diversified streaming portfolios, take advantage of production growth at the mining facilities in which they invest, and they always offer a commitment to gold. Add in the dividends offered by the biggest broadcasters, and streaming seems to be the best way to invest in gold. 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 addition to restrictions on the transfer of shares or equity rights through the operator, which the buyer may require from the operator`s shareholders or parent companies as an additional guarantee, streaming agreements typically contain restrictions on changing the parties` control. As explained above, streaming deals have increasingly become a mechanism for raising capital as an alternative to debt and equity financing, especially for exploration and junior companies with limited budgets that prevent them from entering into credit agreements with traditional financial institutions – which normally involves the provision of comprehensive securities packages that traditional project financing requires. usually. However, in practice, the operator is also obliged, under streaming contracts, to provide the buyer with basic performance guarantees, at least as regards the obligation to deliver the metal and the obligation to reimburse the deposit. In any case, regardless of the applicable laws of the streaming contract, titles relating to assets located in a given country should normally be granted according to the formalities imposed in that country and, in general, according to local law.

For example, in Chile, as in other jurisconsultations based on the Civil Code, titles are granted by a public deed issued in Chile before a notary, because the mortgage and pledge obligations must be registered with certain bodies to become valid (i.e. the register of mortgages and charges of the depositary of mines and the register of pledge deposits without transfer of identity and civil status). . . . .