If you have minerals that you own the royalty rights to, and someone has approached you to sell your mineral royalties rights, you need to do your research to ensure that it is a good deal for you. Here are three things that you need to consider when selling your mineral royalty rights.
#1 Current Market Value
The first thing that you need to take into consideration is the current market value of your minerals that you have rights to. Market value can fluctuate throughout the year and from year to year. For example, over the past year or so, oil has been selling at lower prices than it was in the past. If you owned oil rights, now would not be the best time to sell them if you wanted to maximize your return.
Take some time to research and find out the value of the minerals that you hold rights over. Look into the past, going back five years or so, to see if there are any trends in the value of your rights. If the worth of the minerals that you own is at a high or has remained steady, now may be a good time to sell. If the worth is lower than normal, but forecasts show that it could pick up soon, you may want to hold out on selling right now.
When you sell could be the key to getting the price that you want for your mineral rights.
#2 Be Prepared To Show Their Worth
Any buyer of your mineral rights is going to want you to back up your claims of their value. One of the best ways to show the return they will experience on their investment is to show them your 1099 from the past few years. This will allow a potential investor to see that your mineral rights have been bringing in a steady amount of money over a reliable period of time.
You may also want to share some of your research into the future of your mineral rights if they show a positive value for your rights into the future. This will help show a potential buyer that they are making a smart, long-term investment.
The buyer may also want information about your specific mineral claim. Have your lawyer draw up documents to show the long-term vitality and the number of years left on your claim and the amount of minerals that should be left to harvest.
Make sure that you understand the value of your claim and know its long-term worth, and be sure to convey that information to potential buyers through your lawyer to ensure yourself the best selling price possible.