Royal Gold acquires more royalty interests on Cortez complex for $204.1M

Royal Gold announced that its wholly owned subsidiary, RG Royalties has acquired two portions of a gross smelter return royalty that together cover a large area including the Cortez mine operational area and the entirety of the Fourmile development project in Nevada from certain holders who are successors in interest to Idaho Mining Corporation for cash consideration of $204.1M…The economic effective date for the transaction is December 1 , and all revenue derived from production from the areas covered by the Idaho Royalty after that date will be attributable to Royal Gold. Royal Gold expects to receive payment for the Idaho Royalty on a monthly basis, and the first revenue is expected to be recognized in the fourth quarter of 2022 with the first payment to be received in the first quarter of 2023. Royal Gold expects the Idaho Royalty to contribute approximately 4,000 ounces to Royal Gold’s account in 2023, increasing to over 5,000 ounces in 2028. Royal Gold paid cash consideration of $204.1M to certain holders who are successors in interest to Idaho Mining Corporation. The cash consideration was sourced from available cash resources and a total draw of $200 million on the revolving credit facility…After completion of this transaction and a $75M repayment on the revolving credit facility on December 6 the revolving credit facility currently has an outstanding balance of $575M and a remaining undrawn amount of $425M. In keeping with Royal Gold’s capital allocation strategy, the Company expects to repay this outstanding debt from future cash flow, which is estimated to occur by the second half of 2024 at current metal prices and absent further acquisitions.