International Royalty to pick up Aussie gold NSR

Vancouver — International Royalty (IRC-T) has inked a royalty purchase agreement covering a large package of gold projects, including a producing operation, in Western Australia.

IRC will pay US$10 million to Resource Capital Fund III, a private mining equity fund, to acquire its 1.5% net smelter return (NSR) covering about 12,500 sq. km in the Laverton, Leonora, Meekatharra, Murchison and Southern Cross-Marvel Loch districts of Western Australia. The project area is currently under operation and exploration by Mercator Gold (MCR-L), Saracen Mineral Holdings (SAR-A), St. Barbara (SBM-A, STBMF-O) and the recently listed Terrain Minerals (TMX-A).

The Southern Cross-Marvel Loch mine, operated by St. Barbara, reported fourth-quarter 2005 production of 37,000 oz. with revenues of US$17.5 million at an average gold price of US$475 per oz. St. Barbara is also advancing its Gwalia Deeps and Tarmoola gold projects. The Perth-based company purchased the gold division of Sons of Gwalia in 2005.

Mercator Gold recently launched a drill program on its Meekatharra project, acquired from St. Barbara, aimed at building the existing gold resource of 1.9 million oz. Saracen Mineral Holdings and Terrain Minerals are exploring on the South Laverton and Wonder-Celtic deposits, respectively.

The project area covered by IRC’s planned royalty acquisition hosts a cumulative, measured and indicated resource (compliant with Australia’s JORC code) of 64.5 million tonnes grading 1.8 grams gold per tonne, or about 3.8 million contained ounces, in several deposits.

IRC holds more than 60 royalties on projects containing 14 different commodities. Its premier royalty is the 2.7% NSR on the Voisey’s Bay nickel mine in Labrador, operated by Inco (N-T, N-N).