- DNA Gold “lends” required funds to mining companies in near-term production and short mine life (approximately 10 years) typically ignored by the street (e.g., due to a perceived lack of exploration upside).
- Loans automatically convert to a net smelter returns royalty (NSR) negotiated between the parties (the “Transaction”) at an agreed-upon NSR conversion rate.
- The Transaction is implemented through a Secured Convertible Loan Agreement.
- The Loan is secured against the assets of the target company and can be non-interest bearing, and repayable in one lump sum on or before the maturity date.
- Conversion to NSR takes place upon commencement of commercial production.
- Target companies have the right to repurchase up to 40% of the NSR in the initial 48 months at a premium to the original loan amount.
