Business
Royal Gold Acquires the Gold Hill Royalty From Nevada Star Resource Corp.
Royal Gold Acquires the Gold Hill Royalty From Nevada Star Resource Corp..
About this update from Red Lake Gold Inc
[{"type":"text","content":"\n\n\n\n\nDENVER, Oct. 26 /CNW/ -- ROYAL GOLD, INC. (Nasdaq: RGLD; TSX: RGL) today\nannounced an agreement to purchase a sliding-scale net smelter return (\"NSR\")\nroyalty from Nevada Star Resource Corp. (\"Nevada Star\") on the Gold Hill\ndeposit for $3.3 million. The Gold Hill deposit, located just north of the\nRound Mountain gold mine in Nye County, Nevada, is controlled by Round\nMountain Gold Corporation (\"RMGC\"), a joint venture between Kinross Gold, the\noperator, and Barrick Gold Corporation (\"Barrick\"). The closing of the\nacquisition is subject to customary conditions and is anticipated to occur in\nNovember.\nThe sliding-scale NSR royalty on the Gold Hill deposit will pay 2.0% when\nthe price of gold is above $350 per ounce and 1.0% when the price of gold\nfalls to $350 per ounce or below. The royalty will be effectively capped at\n$10.0 million as Round Mountain has the right, at any time, to purchase the\nroyalty interest on the Gold Hill deposit for $10.0 million, less any royalty\npayments received by Nevada Star and Royal Gold prior to the purchase option\nbeing exercised. The royalty is also subject to a minimum royalty payment of\n$100,000 per year. To date, approximately $375,000 in advanced minimum\nroyalty payments has been made to Nevada Star by RMGC.\nTony Jensen, Royal Gold's President and Chief Executive Officer,\ncommented, \"We are pleased to acquire this royalty position that is located\nnear the prolific Round Mountain mine, which is the fourth largest gold mine\nin Nevada. This new acquisition will complement our existing portfolio and\nbrings us another royalty in Nevada. We already have established a working\nrelationship with Barrick, due to our other Nevada royalty positions, and are\nnow pleased to be associated with Kinross Gold, another highly-skilled\noperator.\"\nThe RMGC is currently conducting an Environmental Impact Statement for\nthe expansion of the existing Round Mountain pit, which includes the Gold Hill\ndeposit. Once permitting is completed and equipment from the Round Mountain\npit expansion becomes available, production is expected to commence at Gold\nHill. Although RMGC's Gold Hill reserves are not separately detailed in their\npublicly available financial reports, Barrick stated in its September 2006\nNevada Mine Tour presentation titled \"Barrick in Nevada,\" posted on ...