McWatters trims its Kiena royalty (April 05, 2004)

McWatters Mining (MWA-T) has agreed to sell a portion of its Kiena mine royalties to Wesdome Gold Mines (WDG-V) for $700,000.

Earlier this year, McWatters sold the Kiena property to Wesdome but kept a 4% net smelter return royalty on existing resources and a 2% NSR on any new resources found on the property.

Under the latest deal, McWatters’ royalty will be reduced to 2.5% on all Kiena resources that are processed.

Also, the original deal called for Wesdome to pay McWatters $1.50 per tonne to process up to 5 million tonnes of ore from any source at Kiena’s mill, with the rate falling to $1 per tonne thereafter. The rate under the new deal is $1 per tonne.

Wesdome is still on the hook for an additional $1 million once the Kiena mill resumes commercial production.

Wesdome retains a first right of refusal on any of McWatters’s remaining royalty interest at Kiena.