The US-based company has acquired the royalty interests in Cortez Complex, which covers a large area including the Cortez mine operational area and the entire Fourmile development project in Nevada, for a cash consideration of $204.1m
Royal Gold buys royalty in Cortez complex. (Credit: Chris Wiedenhoff from Pixabay)
Royal Gold has acquired two portions of a gross smelter return royalty (Idaho Royalty) on the Cortez Complex for a total consideration of $204.1m in cash.
The US-based precious metals stream and royalty company has acquired Idaho Royalty through its wholly-owned subsidiary, RG Royalties.
RG Royalties royalty acquired the interests from certain holders, who are successors in interest to Idaho Mining.
The Cortez Complex covers a large area including the Cortez mine operational area and the entire Fourmile development project in Nevada.
The area within the Cortez Complex is owned or controlled by Nevada Gold Mines (NGM), while the Fourmile development project which is 100% owned and operated by Barrick.
NGM is a joint venture between Barrick Gold with a 61.5% stake and Newmont with a 38.5% stake.
Royal Gold president and CEO Bill Heissenbuttel said: “Cortez is a cornerstone asset for Royal Gold and this acquisition increases and expands our interest at one of the world’s most prolific gold mines, which is operated by two of the leading companies in the gold business.
“We have consistently worked to enhance and extend the average life of the Royal Gold portfolio and this transaction again demonstrates our successful execution of this long-term strategy.”
The royalty package includes a 0.24% gross royalty covering areas, including the currently producing Pipeline and Crossroads deposits.
Also, it includes a 0.45% gross royalty covering areas in the Cortez Hills mine and the Goldrush, Fourmile and Robertson deposits that are in development.
Royal Gold is funding the royalty purchase transaction using available cash resources and a total draw of $200m on its credit facility.
The company expects the Idaho Royalty to contribute approximately 4,000 ounces to Royal Gold’s account in 2023, increasing to over 5,000 ounces in 2028.
It is expected to receive payment for the Idaho Royalty on a monthly basis, with the first revenue considering the fourth quarter of 2022, paid in the first quarter of 2023.
Heissenbuttel added: “The royalty covers areas similar to those covered by the Rio Tinto royalty that we acquired in August 2022, with the important difference that the Idaho Royalty includes the existing Robertson deposits.
“We recognise that our royalty coverage of the Cortez Complex has grown to become more complicated, so as part of this announcement we are introducing a simplified approach to describing our multiple royalty interests across the Cortez Complex.”