Case Study: How to monetize Rare earth by using insurance wraps.

A mine located in Colorado had the opportunity to expand operations, but only had the value of a rare earth metal from a NI-43101 report to prove the value of their assets. Rather than spending their liquid capital, the mine wanted to use the value of the rare earth metal to raise the capital they needed. To do this, they decided to monetize the metal by getting an insurance wrap.

The mine first had to find an insurance company that would provide an insurance wrap for the rare earth metal. They then negotiated the terms of the insurance wrap, determining the amount of coverage they needed and the premium they would pay for the coverage. With the insurance wrap in place, the mine was able to sell the rare earth metal to a buyer at a price based on the current market value of the metal, minus the cost of the insurance wrap.

To ensure the process was structured in the most efficient and effective manner, the mining company sought out the assistance of Bluhe Shire, a private trust, to help them with the file. Bluhe Shire's expertise in financial structures and their experience with insurance wraps allowed the mining company to make the most of their valuable asset and raise the necessary capital without dipping into their liquid assets.

The insurance wrap protected the mine against financial losses if the price of the rare earth metal decreased, and allowed them to receive a fair price for the metal even if the price increased. Thanks to the involvement of Bluhe Shire, the process was completed seamlessly and the mining company was able to reach their goal of expanding their operations.

This case study highlights the importance of seeking expert assistance and utilizing tools like insurance wraps in monetizing valuable assets to achieve financial goals. With the help of Bluhe Shire, the mining company was able to turn the value of a rare earth metal into the capital they needed to grow and expand their operations.

Overall Performance

To calculate the cost of the insurance wrap, we first need to determine the insured amount. According to the information provided, the insured amount was 10% of the value of the NI-43101 report, which valued the in-ground assets at $1,001,352. This means the insured amount was $100,135.20 ($1,001,352 x 10%).

Next, we can calculate the cost of the insurance wrap, which was 1.5% of the insured amount. The cost of the insurance wrap was $1,501.53 ($100,135.20 x 1.5%).

The next step was to monetize the insured amount, which was 90% of the insured amount. The monetized amount was $90,121.68 ($100,135.20 x 90%).

Out of the monetized amount, 10% was available for immediate funding, which was $9,012.17 ($90,121.68 x 10%). The remaining amount was used for trade that reconciled the insurance at the end of the term, which was $81,109.51 ($90,121.68 - $9,012.17).

In summary, the cost of the insurance wrap was $1,501.53 and the available funding for immediate use was $9,012.17, while the remaining amount was used for trade that reconciled the insurance at the end of the term.