Opinion ID: 1239050
Heading Depth: 4
Heading Rank: 2

Heading: Cash

Text: The superior court considered the settlement's $200 million cash infusion to be extremely significant because it assured some income for Trust Authority programs and because it is real money in hand today. The trial court stated that $200 million of mineral value may never produce $1 of income for the trust, because the mineral values are based on probabilities of discovery derived from extremely limited geophysical, geochemical, and geological data with no actual drilling. The superior court also stated that, based on calculations by an expert witness for the Proponents, $200 million in cash is equal to the net present value of the royalties from between $588 million and $6.3 billion in annual mineral production, depending on one's assumptions regarding cost of production, discount rate, mine life, and delay in the start of production. [19] Weiss complains that these comparisons led the trial court to overemphasize the value of the cash component of the settlement. He argues that the court's statement that $200 million in mineral value might not produce any income for the trust represents a fundamental misunderstanding of the valuation process. While Weiss is correct that mineral lands valued at $200 million could presumably be sold for $200 million cash in hand, his argument misses the superior court's point that the capacity of the trust land to produce income is highly speculative. Contrary to Weiss's assertions, these comparisons and calculations were not presented as one of the fundamental underpinnings of the superior court's analysis, but merely as an interesting way to contrast the speculative value of the trust's land with the certain value of cash. The superior court did not err by observing this distinction or by illustrating it. [20]