AngloGold Ashanti has agreed to sell its interests in Northern Colombia Holdings (NCH) to Royal Road Minerals.
NCH owns an exploration title package comprising mining concession agreements covering about 36 000 ha of land, including the rights to acquire mining concessions over about 215 000 ha of land, in prospective mineral belts in the Nariño, Cauca and Antioquia departments of Colombia.
This transaction supports AngloGold’s broader strategic objective to maintain a focused and efficient portfolio, with its key projects in Colombia being Quebradona and Gramalote.
The sale of the exploration title package under NCH represents about 70% by area of the exploration titles outside of AngloGold’s key projects in Colombia.
Upon closing of the transaction, AngloGold will receive a cash payment of $4.6-million.
Further payments will be made to AngloGold in the event of certain milestones being achieved by Royal Road Minerals, including $5-million upon the declaration of an inferred mineral resource of not less than one-million gold-equivalent ounces (GEOs) on any specific area; $5-million on completion of a feasibility study for any specific project; $5-million on the start of commercial production for any specific project; and $20-million in four equal quarterly payments in the first year following the start of commercial production for any specific project.
In the event that Royal Road declares an inferred mineral resource of no less than five-million GEOs on a specific project, AngloGold has a one-off option to buy a 75% interest in that project and certain of the receipts mentioned above are then forfeited for that project.
Closing of the transaction is subject to certain conditions precedent, including the completion of a capital raise of at least $3.5-million by Royal Road and the receipt of certain regulatory approvals by Royal Road and AngloGold.