ACG has agreed to acquire the Serrote and Santa Rita mines from funds advised by Appian Capital Advisory LLP (“Appian”), and Royal Gold has agreed to pay the cash consideration for the royalty interests
Royal Gold to Acquire Gold/Platinum/Palladium and Copper/Nickel Royalties on Producing Serrote and Santa Rita Mines in Brazil. (Credit: Zac Edmonds on Unsplash)
Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we” or “our”) announced today that its wholly-owned subsidiary RG Royalties, LLC, has entered into a binding commitment letter with ACG Acquisition Company Ltd. (“ACG”) to acquire new royalty interests on the producing Serrote and Santa Rita mines in Brazil for total cash consideration of $250 million, subject to satisfaction of certain conditions, including negotiation and execution of definitive documentation. The royalty interests consist of a gold royalty on the Serrote mine, a gold, platinum and palladium royalty on the Santa Rita mine, and a copper and nickel royalty on both the Serrote and Santa Rita mines (collectively, the “Royalties”).
ACG has agreed to acquire the Serrote and Santa Rita mines from funds advised by Appian Capital Advisory LLP (“Appian”), and Royal Gold has agreed to pay the cash consideration for the royalty interests upon the closing of the transaction between ACG and Appian, which is expected to occur by the end of July 2023, after the satisfaction of closing conditions. ACG will be renamed ACG Electric Metals upon completion of the acquisition of the mines from Appian.
“I am pleased to announce this proposed acquisition of royalties on two attractive producing mines,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “Royal Gold’s financing is expected to play a significant role in the creation of ACG Electric Metals, and our role demonstrates the flexibility and attractiveness of our financing product.”
“This proposed acquisition meets our strategic criteria for investment,” continued Mr. Heissenbuttel, “as the royalties will provide predominantly precious metals revenue on producing mines that we believe have excellent long-term potential, are run by experienced local operating management complemented by seasoned corporate leadership, and are located in a mining-friendly jurisdiction. These assets, management team and jurisdiction will fit well within our existing portfolio, and our new relationship with ACG also has the potential to provide further growth opportunities in the future.”
Source: Company Press Release