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LEXPERT RANKED LAWYERS nies are more isolated from these risks. Typically streamers buy precious metal by-products – silver or gold – from mines producing base metals such as copper or nickel, and get them at prices well below market prices at the time. For example, in deals over the past few years, Silver Wheaton has been paying about US$4 per ounce of silver and US$400 an ounce for gold, with small inflation adjustments built into most contracts. The deals can be very lucrative for streaming companies should precious metal prices go up in the future. And, aside from the lump-sum payments streamers pay to help mine companies expand or get new mines into production, the ongoing payments for gold or silver byproduct help miners offset the cost of extracting their other target base metals. On the other hand, when royalty firms provide upfront capital, it's usually to help junior mining companies to prove new finds or in the capital-intensive work of bringing undeveloped mines closer to production. The deals are often smaller than streaming transactions. But in exchange for their cash, their patient money, royalty firms get a long-term or permanent royalty on the future production of precious metals. Though royalty structures differ, typically, companies such as Franco-Nevada Corp. (which also does stream deals), Royal Gold, Inc. or Sandstorm Gold Ltd. get between 2 and 5 per cent of what is known as net smelter returns (NSR). The NSR is the total revenue minus production costs a mine property gets for the sale of its metals. Even if traditional sources of funding open up again, predicts Litwack, "I really believe that these very sophisticated streaming companies are not simply going to say, oh, you know what, mining companies don't need us any more....I think they are going to, through innovation, find ways to maintain their position to remain important in the financing of mining projects. They are not just going to fold up their tents because the capital markets are more generous." Vancouver lawyer Ron Murray of Farris, Vaughan, Wills & Murphy LLP is of a similar mind. Streaming deals have "become much less foreign now," he says. "If you have a structure that works, and you've been through the process, and it's not as painful as debt financing, for example, and you start to see some of the benefits, you may very well find that your go-to source of financing in the right circumstances is a stream." Though precious metal prices are trending downwards and are expected to decline by at least 10 per cent in 2013, Erik Goldsilver, a Toronto partner with Cassels Brock & Blackwell LLP, continues to see stream and royalty deals being hammered out for new mine projects around the world. But because of the price drops, says Goldsilver, who helped close a $750-million streaming deal last year between Silver Wheaton and Abdel-Barr, Khaled S. Lawson Lundell LLP (604) 631-9233 kabdel-barr@lawsonlundell.com > Mr. Abdel-Barr advises on acquisitions and dispositions, strategic partnering and alternative financing arrangements in respect of mines and mining projects, and on a broad range of mining-related matters domestically and internationally. Accursi, Chad Cassels Brock & Blackwell LLP (416) 860-2937 caccursi@casselsbrock.com > Mr. Accursi represents public mining companies and investment dealers in a variety of transactions including public and private security offerings, stock exchange listings, M&As, initial public offerings and general securities compliance matters. Ainley, William M. Davies Ward Phillips & Vineberg LLP (416) 863-5509 wainley@dwpv.com > Mr. Ainley has been lead counsel for bidders and target boards in many of Canada's largest, most complex public company M&A transactions, and has advised foreign purchasers in numerous foreign acquisitions of major Canadian resource companies. Ali Khan, Abbas Bennett Jones LLP (416) 777-5388 alikhana@bennettjones.com > Mr. Ali Khan practises in the capital markets area, with an emphasis on public and private offerings of securities, joint ventures, take-over bids, M&A and governance matters. He acts for clients in a wide range of industries, particularly mining. Amm, Michael D. Torys LLP (416) 865-8140 mdamm@torys.com > Mr. Amm, co-head of the firm's Mining and Metals group, specializes in M&A, corporate finance and joint ventures in the mining sector. He has significant experience with international transactions, including acting for major China-based clients. Arellano, Ian W. Torys LLP (416) 865-7997 iarellano@torys.com > Mr. Arellano, co-head of the firm's International Initiative, specializes in mining joint ventures, royalty and streaming transactions, M&A and offtake arrangements. He is fluent in Spanish and has significant experience with transactions in Latin America. | WWW.LEXPERT.CA 2013/14 | LEXPERT 7

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