I’ve enjoyed a nice profit in SLW over the past few months with call options and I assume I’m not alone.
I like the fact that SLW is now a gold/silver streaming company 40/60% respectively with 75% of the gold coming from Vale 300,000 oz. per year with huge upside potential.
RGLD is almost 3x the cost per share than SLW without much difference in the amount of gold not to mention silver being delivered. This seems like a long term buy to me. BUT,
I realize there’s a tax issue with the CRA. Canadian CRA is not the same as US IRS in a sense the IRS is government regulated and CRA is State regulated.
Randy Smallwood (SLW CEO) suggests that if the CRA found that SLW was doing something wrong then every other streaming/mining company in Canada who has mines in other Countries and pay their effective tax to each country they are in would all be liable as they are all set up and paying their tax the same as SLW including (SAND) who’s CEO/PRES Nolan Watson played an intricate part in setting up the tax structure for (SLW) as their CFO.
If the CRA is successful in their findings then a lot of other Canadian mining/streaming companies would face similar investigations.
SLW has taken the CRA to court as these cases are decided in court by the State. Even if the CRA is successful these cases are mostly settled out of court with an agreed settlement at a far less % of the original investigation.
It would be less expensive settling than paying for the legal costs to defend in many cases.
What will be the impact for RGLD, SAND, FNV and many other Canadian companies who’s mining is done in other countries and have similar tax structures in place?
I would appreciate any opinions from my fellow gumshoe irregulars. Thank you. Bill
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