EuroZinc Mining (EZM-T) has completed its buyout of royalty holders on the Neves Corvo mine following a deal with Portuguese state agency Empresa de Desenvolvimento Mineiro (EDM).
EuroZinc will pay EDM US$26 million for price-participation rights held by EDM since EuroZinc bought the operation last June. The rights were dealt to EDM and to the other vendor, Rio Tinto (RTP-N), at the time of the sale.
EDM had held 51% of the participation rights interest, which was calculated at 50% of the premium over a base value, multiplied by the quantity of copper produced quarterly. The base value was US$1,984 per tonne (US90 per lb.) in the year after the sale, and increased to US$2,094 (US95 per lb.) in the second through the fourth years.
Repayments of the loan that financed the buy-back are scheduled according to the notional price of the participation rights, but the whole loan, US$48 million, will be repaid within 18 months.
Along with the buyout of the royalty, EDM and EuroZinc have entered into an agreement covering the 549-sq.-km land package surrounding Neves Corvo. The agreement gives EDM the option of exercising a 15% working interest in any project EuroZinc brings to a pre-feasibility study.
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