Aston Bay Holdings Ltd. (TSXV:BAY) announced the amendment to the royalty provision of its option agreement with Commander Resources Ltd. (TSXV:CMD) on the Storm Project. The amendment is set to reduce the Gross Overriding Royalty from 0.875% to 0.4% by making a one-time payment to Commander Resources Ltd. under a set schedule.
As quoted in the press release:
The amendment allows Aston Bay to reduce the Gross Overriding Royalty from 0.875% to 0.4% by making a one-time payment to Commander Resources Ltd. under the following schedule:
$2 million if payment is made in the 2014 calendar year; or
$3 million if payment is made in the 2015 calendar year; or
a payment of $3 million plus an additional $1 million for every calendar year following 2015 (for example: $6 million if payment is made in 2018).
Aston Bay President and CEO, Benjamin Cox, said:
Aston Bay’s ability to reduce the royalty in the future has been a key issue with potential strategic partners. This amendment resolves that issue and allows the Company to move discussions forward. We appreciate Commander’s willingness to fine-tune our agreement and provide Aston Bay with greater flexibility in the way the project is advanced.