Toronto- and New York-listed Osisko Gold Royalties has entered into an agreement to purchase an up to 2.75% net smelter return royalty on the Tocantinzinho gold project, in Brazil, for $10-million.
Tocantinzinho is a permitted and construction-ready, openpit gold project operated by Eldorado Gold.
The project has a mineral inventory of 39-million tons, grading 1.42 g/t gold for 1.78-million ounces in proven and probable reserves.
According to an updated technical report, Tocantinzinho would produce 170 000 oz/y at an all-in sustaining cost of $615/oz over a ten-year life.
The operator of Tocantinzinho has a one-time buydown option in relation to the royalty. At the time of project construction, Eldorado may make a payment of $5.5-million to reduce the royalty percentage by 2% resulting in a royalty of 0.75%. Pursuant to a pre-existing agreement entered into by Sailfish, the buydown payment is payable to the original royalty owners.