What we own The Group retained a royalty on the Groundhog anthracite project located in north-west British Columbia, Canada, following its disposal of the related mining licenses in 2014 to the project’s operator, ASX-listed, Atrum Coal NL (‘Atrum’). The royalty entitles the Group to the higher of 1% of gross revenue on a mine gate basis or US$1.00/t from coal sales derived from Panorama licences. Following a series of discussions during 2016, an agreement was reached to settle amounts outstanding under a promissory note in return for additional royalties as follows: 0.5% GRR covering all production within Atrum’s Groundhog Anthracite Project (“Groundhog”) tenements from first production until ten years from the date that Atrum declares commercial production on the project; and subsequently 0.1% GRR from production within the Groundhog North Mining Complex project area.
Performance On June 9, 2016 Atrum announced a revised PFS which outlined an underground project capable of producing 880ktpa of ultra-high grade anthracite over a mine life of 28 years. Atrum published its key objectives for 2917 of February 14, 2017 which targets a small mine permit to enable them to produce up to 250kt from Groundhog per annum.ValuationThe Groundhog royalty is classified as a royalty intangible asset on the balance sheet. As such, this asset is carried at cost less amortisation and impairments. Royalty intangible assets are amortised when commercial production commences, on a straight-line basis over the expected life of the mine.
Valuation The Groundhog royalty is classified as a royalty intangible asset on the balance sheet. As such, this asset is carried at cost less amortisation and impairments. Royalty intangible assets are amortised when commercial production commences, on a straight-line basis over the expected life of the mine.