Resolute buys Mako gold royalty
PERTH (miningweekly.com) – Gold miner Resolute Mining has agreed to the acquisition of a 1.1% royalty held by the original project financiers over the Mako gold mine, in Senegal.
Resolute on Tuesday reported that the termination value of the royalty has been agreed upon as $12-million, with the consideration to be paid in either cash or shares at the election of the royalty holders.
The royalty was initially established in 2017 as part of the project funding put in place by Mako’s previous owner Toro Gold for the construction of the mine. Under the terms of the royalty, the mine owner is required to pay the royalty holders 1.1% of the gold revenues associated with the first 1.4-million ounces of gold mined from Mako.
The royalty is secured over Mako and all related assets, including shares of the companies within the Toro Gold structure.
“Acquisition of the Toro Gold royalty will boost the future cash flows received by Resolute from Mako and further enhances our exposure to higher gold prices and future exploration success. We are working to simplify the company’s capital and debt structure and the termination of this external royalty on sound financial terms is value accretive for Resolute,” said MD and CEO John Welborn.
The issue of shares and the settlement of the royalty acquisition would be subject to Resolute shareholder approval, which will be sought at the company’s extraordinary general meeting on February 27.
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