Streaming Agreements

The main objective of these interconnection agreements is to define the primacy of interests and rights in the event of delay. However, unlike streaming agreements, where the interests of the parties are more or less synchronized, intercreditory agreements involve a much more complex negotiation, as the buyer will insist that the operator remain in business while the financial institution seeks to realize the securities5. Undervalued. not to benefit from a subsequent increase in market value. If the mining company is unable to negotiate optional buybacks to purchase all or some of the electricity, the investor can get a considerable windfall without having to compensate the mining company for this benefit. This problem can be widespread when the market for the diffused product is particularly volatile. Over the past decade, persistent volatility in commodity prices, rising production costs and the reluctance of formal financial institutions have led mining companies to face certain difficulties and higher costs in seeking financing through traditional financing, which has led them to set up alternative mechanisms outside the formal financial market and usual project financing structures. in research. Streaming deals have become an alternative that is making way for a whole new sector that has acquired an important role in the global market in terms of players, number of transactions, mineral volume and financial values. Due to their flexibility and the emergence of specialized non-traditional investors, streaming agreements play a predominant role in financing mining projects, as they are accessible to every mining company, regardless of their size and level of development. As a result, streaming agreements and transactions are becoming more sophisticated non-traditional financial instruments and a relevant trend in the global mining industry.

Any streaming agreement is unique and complex and can have a significant impact on the parties, especially when it comes to taxes. Specialist advice on conditions is needed to carefully assess the consequences and implications of the different obligations. In addition, in the case of streaming contracts, it is particularly relevant that the operator guarantees and guarantees to the buyer the legitimate and exclusive ownership of the metal broadcast; the absence of charges and other rights in favour of third parties; and the legal possibility to exploit, produce and sell the metal in streaming with preferential and exclusive rights….