Ann: Northern Star acquires Hermes Gold Project, page-17

I've been digesting the ALY/NST deal. While it may be the case that a deal may be better than no deal, ... that doesn't necessarily make it a good or fair deal. I have no objection to joint ventures. However, I do have fundamental concerns regarding 2 aspects:

PROBLEM 1: HERMES tenement is sold outright

There is no farm-in or joint venture at all re Hermes.  The whole point of being an explorer is to keep your options open to the upside. If it turns out that the mother load is sitting on the Hermes tenement, then it is my understanding that ALY basically get nothing. That is not a good deal. The same deal could have been structured with ALY free-carried with a 20% to 30% stake, without substantially changing the fundamentals to NST, but still leaving SOME upside for ALY.  Sorry - but this is not the way to do business.

The royalty of 1% is an embarrassing  joke, made even worse by then capping it to 90,000 ounces? Why cap your upside? Highly dubious.

To put things into perspective, if 200,000 ounces indicated resources at Hermes yields 50,000 to 100,000 ounces recoverable, and NST can make say $400 per ounce, then they are looking at $20million to $40million profit on what is already known and discovered in the ALY Hermes tenement. For what:  $1.5m expenditure?!

PROBLEM 2: Sale of 15% of ALY to NST for $500K  (at 1.5c per share)

If NST wanted to buy 15% of ALY on market, how far do you think they would get at 1.5c per share?  Maybe they would manage to accumulate $20,000 of shares at that price? The only people selling at that price are short-sighted day traders who got bored of waiting for something to happen. There is no substantive supply at that price level and never has been ... just dribs and drabs. That price  substantially undervalues the company, and it shortchanges shareholders who have put up money at the most recent cap raising at 2.5c per share: itself a substantial discount to the fundamental value of the firm. Why should NST or anyone else effectively get control of ALY at such a lowball price? Again, this is not the way to do business. I think it is a sell-out. And it is bad salesmanship.

JOINT VENTURE components: I do welcome NST's experience and joint venture components, but even here the terms are onerous to ALY. Under the terms, NST get an 80% stake for spending $400K per year, for 3 years. That's basically NST sinking a few drill holes per year, and ALY losing 80% of their asset in the process (actually, 83% stake, since NST will own 15% of ALY too). From 100 to 17% for $1.2 million? Not a way to business. ALY should have retained at least 30% interest.

I would say NST know what they are doing here. I think ALY are getting shafted.

I certainly won't vote to approve this.