(Kitco News) - Royal Gold (NASDAQ: RGLD) announced today that its wholly owned subsidiary has acquired two portions of a gross smelter return royalty (the "Idaho Royalty") that together cover a large area including the Cortez mine operational area and the entirety of the Fourmile development project in Nevada from certain holders who are successors in interest to Idaho Mining Corporation for cash consideration of $204.1 million.
The area within the Cortez Complex is owned or controlled by Nevada Gold Mines, a joint venture between Barrick Gold (61.5% owner and operator) and Newmont (38.5% owner), with the exception of the Fourmile development project which is 100% owned and operated by Barrick.
In a statement, the company said that the Idaho Royalty consists of a 0.24% gross royalty rate covering areas including the Pipeline and Crossroads deposits, and a 0.45% gross royalty rate covering areas including the Cortez Hills, Goldrush, Fourmile and Robertson deposits.
Importantly, Royal Gold noted that the Idaho Royalty is life of mine, is not subject to any stepdowns or caps, and there are no deductions applicable, adding that the Idaho Royalty is currently generating revenue and covers a total area of approximately 630 square miles.
Royal Gold also said it 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.
"With this transaction we have further consolidated our royalty position at the world-class Cortez Complex," commented President and CEO Bill Heissenbuttel. "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."
Royal Gold 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 December 31, 2022, the company owned interests on 186 properties on five continents, including interests on 40 producing mines and 20 development stage projects.
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