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Anglo Australian Resources (ASX: AAR) reached agreements to end royalty payments at its Mandilla Gold Project, located 70km south of Kalgoorlie in Western Australia.
The first royalty holder, which was due to receive $1 per tonne of gold ore mined and treated, will receive 1,142,588 ordinary AAR shares at a deemed issue price of $0.175 per share
The second royalty holder will receive a US$400,000 paylout. The extinguished royalty agreement was pegged at 4% net smelter royalty on gold production in excess of 100,000oz; and a price participation royalty of 10% of every dollar the gold price exceeds A$600 for every ounce produced.
Anglo Australian Managing Director, Marc Ducler, calls the transaction transformational.
"The agreements we have struck with the royalty owners amount to a transformational development for the Company, given our corporate focus on advancing the project as quickly as possible and delivering a maiden Mineral Resource," said Ducler.
“With the Mandilla Gold Project effectively royalty free, we can focus on the ongoing drilling programs – which are progressing well and laying the foundations for a maiden Mineral Resource Estimate later this calendar year. Given the strategic location of the deposit, we are now extremely well-placed to continue to build value in the company and realise full value for the potential ounces in the ground.”
By Michael McCrae
For Kitco News
