Rio Tinto has completed the sale of a royalty it holds on an area including the Cortez mine operational area and the Fourmile development project in Nevada to RG Royalties LLC, a direct wholly-owned subsidiary of Royal Gold Inc., for $525 mn in cash.
The Cortez Royalty is a 1.2% gross production royalty on the Cortez gold mine that is operated by Nevada Gold Mines, a joint venture between Barrick Gold Corporation and Newmont Corporation and the Fourmile project which is 100% owned and operated by Barrick.
Rio Tinto obtained the royalty as partial consideration for the sale of its 40% interest in the Cortez Complex to Barrick in 2008. Royalty payments commence once the Cortez Complex has produced a total of 15 mn ounces of gold since 2008. This is expected to occur imminently.
Rio Tinto Chief Financial Officer Peter Cunningham said: “This transaction unlocks hidden value from our portfolio and releases cash immediately.”
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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