Net Smelter Return.
From Wikipedia, the free encyclopedia
Net Smelter Return (NSR) is the net revenue (total revenue minus production costs) that the owner of a mining property receives from the sale of the mine's metal/non metal products less transportation and refining costs. As a royalty it refers to the fraction of net smelter return that a mine operator is obligated to pay the owner of the royalty agreement. The royalty is paid in variable or fixed payments based on sales revenue received by a mining operator in return for mining output. It is contingent only on the sales price and quantity of product sold.
The term is named so due to the fact most of the time, mining output sold requires further processing by smelters; the mining products purchased directly by smelters are sold to them for a discounted (net) price based on how much further processing is needed. The mining lease specifies the selling price (prices are different in spot and forward markets) and is used to verify the exact amount of product that's produced and sold between royalty payments.
One advantage NSR royalties have over other royalties is that usually, payments are higher in the short term because capital costs and exploration costs cannot be used as deductions (some royalties don't have to be paid until after other costs such as loans / amortization are taken care of). Also, mine life and royalty expiration dates need to be taken into consideration. The royalty can be called a Net Value Royalty when deductions are based solely on the contract.
Alternatively the Gross Smelter Return is a percentage of gross revenue paid by mine owner that isn't subject to any deductions."
I am very pleased to report our latest development on Los Azules.
We have finally locked up the participation in this unique world-class copper asset for the benefit of all our shareholders:
1. Now we do not have to wait for feasibility study.
2. We do not have to contribute any capital.
3. Our industry standard NSR in "one of the largest undeveloped copper projects", according to McEwen Mining, is in effect immediately and can be monetised now at any time.
4. 0.4% NSR is now attributed to the entire Los Azules project - it is higher than pro-rata 0.6% attributed to only our part of Los Azules before.
5. We will participate in sale of Los Azules by McEwen Mining within 36 month and it is not affecting our NSR.
6. We are receiving shares in McEwen Mining.
7. Now TNR Gold will benefit directly from:
A. Sale of Los Azules by McEwen Mining within 36 months.
B. Rise in value of McEwen mining shares.
C. Rise in Copper prices.
D. Potential increase in the deposit size and quality of the reported resources of the entire Los Azules.
E. Further feasibility studies conducted by the McEwen Mining or the new Operator and advancement of the project.
Jim Mustard VP of PI Financial can provide you with additional information on Los Azules Copper project and TNR Gold assets related to it.
Please read our full legal disclaimer in our presentation and on our website: http://www.tnrgoldcorp.com/
Stay tuned: new presentation will reflect this very important development for our company.