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Royal Road Minerals Enters into Binding Letter of Intent for the Sale of Its 50% Interest in the Luna Roja Gold Project in Nicaragua
Toronto, Ontario--(Newsfile Corp. - December 17, 2020) - Royal Road Minerals Limited (TSXV: RY...
About this update from Royal Road Minerals Limited
[{"type":"text","content":"Royal Road Minerals Enters into Binding Letter of Intent for the Sale of Its 50% Interest in the Luna Roja Gold Project in NicaraguaToronto, Ontario--(Newsfile Corp. - December 17, 2020) - Royal Road Minerals Limited (TSXV: RYR) (\"Royal Road\" or the \"Company\") is pleased to announce that it has entered into a binding letter of intent (the \"Letter Agreement\") with Mineros S.A. (\"Mineros\"), pursuant to which the Company has agreed to sell to Mineros its entire 50% interest in the Luna Roja Project, comprising the Monte Carmelo I and Monte Carmelo II mining concessions, in Nicaragua. The Luna Roja Project is currently jointly owned and operated by the Company and Hemco -Nicaragua,S.A. (\"Hemco\"), a wholly-owned subsidiary of Mineros, pursuant to the terms of a strategic alliance agreement (the \"Strategic Alliance Agreement\") dated September 1, 2017, as amended.Under the terms of the Letter Agreement, the Company agreed to sell and Mineros agreed to purchase the Company's 50% interest in the Luna Roja Project on the following key terms: Purchase Price - Mineros will pay to the Company a purchase price of (i) US$22.5 million payable in cash on the closing of the proposed transaction, plus (ii) a 1.25% net smelter royalty on all future mineral production from the Monte Carmelo I and Monte Carmelo II mining concessions commencing from the first production therefrom. Expenditure Commitment - The Company will invest no less than US$7.5 million over a five-year period in exploration operations on the strategic alliance properties in Nicaragua.\"This is a model transaction, anticipated under the terms of our successful strategic alliance with Mineros and in-keeping with the ambitions of both companies,\" said Tim Coughlin, Royal Road's President and CEO. \"Our focus moves now to the exciting Caribe gold discovery, located just 16km to the south of Luna Roja and to other promising gold and copper projects we are advancing together, throughout the highly prospective 'Golden Triangle' and elsewhere in Nicaragua\". The completion of the proposed transaction is subject to a number of conditions including the entering into by the parties of a definitive agreement (the \"Definitive Agreement\"), the prior approval by the boards of directors of each of Mineros and the Company of the Definitive Agreement, the closing of the proposed tran...