TSX- and NYSE-listed Entrée Resources has sold its 0.5% net smelter return royalty on Candente Copper’s Cañariaco copper project, in northern Peru, to TSX- and LSE-listed natural resources royalty and streaming company Anglo Pacific Group.

Under the terms of the agreement with Anglo Pacific, Entrée transferred all the issued and outstanding shares of its subsidiaries that directly or indirectly hold the royalty to Anglo Pacific for $1-million, payable by the issuance of 478 951 Anglo Pacific shares.

Entrée has agreed to hold the share consideration for a period of at least 90 days following closing.

Additionally, Entrée retains the right to a portion of any future royalty income received by Anglo Pacific in relation to the royalty, with Entrée receiving 20% of any royalty payment for any calendar quarter up to and including the quarter ending December 31, 2029.

Entrée’s entitled royalty portion drops to 15% between January 1, 2030, and December 31, 2034,  and then to 10% between January 1, 2035 and December 31, 2039.

"We are very pleased to enter into this agreement with Anglo Pacific. In addition to making a 100% gain on its initial $500 000 investment, Entrée also retains long-term exposure to a potential royalty income stream from the Cañariaco copper project, when and if it is developed.

“Anglo Pacific has a continuing policy of paying a substantial portion of its income from royalties and streams to shareholders as dividends. We look forward to that dividend income as a future source of cash,” commented Entrée president and CEO Stephen Scott.

The sale of Entrée's respective subsidiaries that hold the royalty to Anglo Pacific will further reduce Entrée's yearly “cash burn rate”, thereby better positioning the company as it moves towards first development production from the Entrée/Oyu Tolgoi joint venture property in Mongolia.