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Rio Tinto completes sale of Cortez gold royalty to Royal Gold for $525 million in cash

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(Kitco News) - Rio Tinto announced Tuesday it has completed the sale of a royalty it holds on an area including the Cortez gold mine operational area and the Fourmile development project in Nevada to Royal Gold, for $525 million in cash.

According to the company's statement, the Cortez royalty is a 1.2% gross production royalty on the Cortez gold mine that is operated by Nevada Gold Mines, and the Fourmile project which is 100% owned and operated by Barrick.

Nevada Gold Mines is a joint venture between Barrick Gold Corporation (61.5% owner and operator) and Newmont Corporation (38.5% owner).

Rio Tinto said it obtained the royalty as partial consideration for the sale of its 40% interest in the Cortez Complex to Barrick in 2008, adding that royalty payments commence once the Cortez Complex has produced a total of 15 million ounces of gold since 2008, which is expected to occur imminently.

Rio Tinto Chief Financial Officer Peter Cunningham said, "This transaction unlocks hidden value from our portfolio and releases cash immediately."

The Cortez Complex is situated along the Cortez/Battle Mountain trend and is located 100 kilometers southwest of the town of Elko, Nevada in the Lander and Eureka counties.

Gold production from the Cortez Complex has averaged 1.1 million ounces per year over the 10-year period from 2012 to 2021, and Barrick expects this to increase to above 1.3 million ounces per year by 2027.

Nevada Gold Mines has reported gold reserves of 14.0 million ounces and a total resource base of 24.8 million ounces (17.4 million ounces of measured and indicated resource, and 7.5 million ounces of inferred resources), inclusive of reserves, as of December 31, 2021 for the areas covered by the royalty.

Royal Gold (NASDAQ: RGLD) is a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties and similar production-based interests. As of June 30, 2022, the company owned interests on 185 properties on five continents, including interests on 41 producing mines and 19 development stage projects.

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