Mineral rites prices

[Hopperbin]

Just got offered 39,000 dollars cash to sell my potash mineral rights on 158 acres of land I own. Was given a brief description of what a lease would look like, in our area there is 14,200 square kilometers involved in the mining area, they are offering a lease based on the total of this area weather they mine under your property or not a yearly lease payment based on the amount of potash they mine, and the price of the potash in the year mined so the lease price will change every year based on potash price and tons mined and lease life is estimated at 75 years to finish mining this area. I will get better details on what I am offered in the lease later in a letter. But was hinted that 10 grand per year is possible. I have several other quarters with mineral rights within a few miles of this one so I guess I am at the edge of this mining zone. What are others getting for current potash leases? What is an oil lease worth? There is no surface rights involved in this lease. Is it possible to negotiate this lease offer or does one just decide to accept it?

[Hopperbin]

I feel the guy was in error mentioning 10 grand per year, then again will some day find out.

[Hopperbin]

This was BHP to purchase not a third party.

[SASKFARMER3]

Great topic hopper as this is a new thing
and a lot of Saskatchewan farmers need to
know. We have 14 quarters with mineral
rights and I have the results from the
holes that were drilled back a few years.
Yes Santa Clause their is a layer of
potash.
Keep us updated with info.
THanks

[Hopperbin]

Just a couple things the lease initial sign up was to pay 2370 dollars for initial sign up. 316 dollars per year until mine start up, estimated to be in 2015, then the yearly lease will be based on mine output after start up.

[cottonpicken]

Your in jackpot country,be careful what you sign.

If your signing a lease,like 3 years,in oil you'll get a
dollar per acre amount paid no matter what happens
and a lump sum payout depending on how valuable it
is,30$ an acre low end,high end,god nows,you then
get 15-19% of what comes out of the
ground,depending on whats negotiated,

Never ever sell your minerals in my opinion.

[Hopperbin]

Cotton what do you mean by signing a 3 year lease? Is it then negotiated after that? This potash one I think is a lifetime one for the time it takes to mine the area of potash. Is a shorter lease the norm in oil country? Should I be concerned about other minerals in my soil? My mother accross the road has a gassy water well actually rare in the area. Yet the water is of the highest quality around. We have no oil or gas for many miles around but maybe we should think of it.

[riders2010]

Might be a stupid question but do the mineral rights come with your land you own or did you have to purchase them at some point originally?

[cottonpicken]

3 years is sort of a standard lease,after that its open
unless they do drill then they have it locked up,then
you get a one time payment of i think 5000$ per
well,then 2500 every year after,minerals or no,ihave
heard of higher negotiated prices.

The problem as i see it is not scaring them off of
getting something out of the ground on your
land,which is the percentage 15-19%,thats the big
money.

The numbers you are talking don't compute
compared to oil,also very different industry,remember
if this is underground and not solution(possible not
probable)they will not be running underground for
much of a distance from their base.

If you are near wynyard please let me know,we have
potash assets there.

[cottonpicken]

As i understand it.

Mineral rights were given to odd number sections of
land and the crown took the rest along with the
railroads and schools getting different numbered
sections.

Then way back the ndp jacked taxes and made paying
on the minerals an option,which many took and those
minerals on them lands went to the crown,god bless
the queen,**** i hate that song.

I reserve the right to be wrong,old memory info.

[Hopperbin]

Cotton I don't know what the grade and thickness of our potash layer is but say if it is 10 feet thick spread over a quarter section, can you attempt to put a price of what that layer is actually worth in gross dollars not taking into account the mining costs? 39,000 I am sure would not even be close.

[cottonpicken]

10-million?If it was gravel.

Potash?

If you wanted to get creative you start your own
company/penny stock,drill holes establish resource
base get near by neighbours on board,hit the tsx
venture exchange with the resource,sell half your
shares and wait for a buy out.

[cottonpicken]

39,000 what the hell is that?the big blind in the
farming poker game?

[checking]

I know that hopperbin realizes that it takes a willing grantor and a willing grantee to achieve a mineral lease. On that premise, there is no such thing as a standard three year mineral lease. It is all in the bargaining. If the developer is serious, he requires no more than a year to develop oil and gas rights. Anything longer and I would suggest that the mineral owner is more interested in the per acre leasing money than in the potential real money that comes with development. If he is nothing more than a parcel accumulator then he is looking for as long a lease period as the mineral holder is silly enough to grant him. Your first question to the landperson should have been, "What company wants to develop my minerals?" If they won't tell you, and many of them won't, show them the door they entered.

[gotap]

I am wondering, like Hopperbin, how to find out what mineral rights are worth. BP wants to rent or buy rights that my brother and I own. The inital offer consists of a signing bonus, rent of $2.00 per acre and the lease is for 20 years. When the mine starts producing, royalties vary from 4.5% to 9%. I assume that all the terms are negotiable, but can anyone tell me what other people are getting for mineral rights? Any information would be helpful, as we are just starting this process and would like to educate ourselves.