Royalty Holder……………….Hydra Ltd
Revenue……………..…..……………$22m
Mine Life...……………..…………………n.a.
Commodity……………………………Silver
Operator…………………………….Nyrstar

#11 Port Pirie

Swiss group Nyrstar, one of the world's largest zinc smelting companies, announced an unorthodox funding agreement to upgrade its Port Pirie smelter in South Australia last year.

The total capital cost was A$518m, which Nyrstar part-funded through a forward sale. The counter-party, Hydra Limited, paid $109m for nearly 8m ounces of silver, due to be delivered by Nyrstar over five years, following the site's renovation in 2016.

Hydra is described as a “special purpose vehicle” and further details have not been disclosed. Akin to a stream over Port Pirie, or an old-fashioned gold loan (under which mining companies repaid bank debt in ounces of gold), the structure may be tax driven.

Alternatively, a private company is sitting on a substantial forward silver position, bought at a $3 discount to the silver price at the time.

 

 

BACK                                               NEXT >