When I thought that 27 million tonnes of material may be mined in 2015/2016 - per the Entree presentation - this deal looked fantastic.
Without those 27 mt's being mined, I would call this a downright awful deal. Consider the opportunity cost:
For approximately $50 million, we estimate the Mutiny stream will pay us $10-$12 million per annum, assuming production remains constant. That is a 5 year payback, with a 2 year timeline to construction completion. Call that a 7 year payback. In actuality we know that there are several factors that may reduce this payback - mining higher grade earlier on, expansion of the resource and the number of tonnes milled daily - but let's ignore these, for now.
If we had taken that $55 million to Entree and invested it in a similar deal to Mutiny, we'd be tagging on an additional $10-$12 million 2 years from now. Over the next 8 years, we'd earn ~$80 - $96 million in cash flow. Lets say that, 8 years from today (i.e. 6 years after production begins), we reinvested $60 million of the cash earned in another deal that would earn us $12 - $14 million / year. Two years from this deal, i.e., the date that they estimate OT would begin production, we'd have two streams, one earning us $10 - $12 million, and the second purchased from the cash flow of the first earning us $12 - $14 million, for a total of $22 - $26 million.
Take into consideration that SSL always looks for projects that can grow significantly in size, odds are that at least one of these deposits would ramp up to greater than planned production, and voila, we'd be earning maybe $25 - $35 million from these two streams combined.
A very realistic scenario, and, the reason why I just don't understand the Entree deal. The TIME VALUE of that $55 million they just courier pigeon'd to Mongolia is huge. We could be making as much as the Mongolia stream is expected to earn by just doing smaller North American deals.