Royal Gold assumes control of Greek exploration project

Royal Gold (RGLD-Q) has taken control of the Milos gold project in Greece following the termination of an agreement with an Australian investor group.

In March of this year, Royal announced an agreement with the investor group to explore Milos island, along with other islands in the Cyclades chain of the south Aegean Sea. The partners were to spend US$5 million to earn a 50% interest in the project from the mining lease holder, Athens-based Silver & Baryte Ores.

By late May, Royal dispatched a letter notifying the investor group that it was in default under the agreement to jointly fund exploration. Having received no response, Royal terminated the agreement in late June and assumed responsibility for all continuing work on the project.

With the investor group out of the picture, Royal may now earn the 50% interest in Milos itself. Silver & Baryte has the choice to retain its 50% interest or convert to either a 20% net profits interest or a 5% net smelter return royalty.

To date, Royal has spent US$600,000 on reconnaissance mapping and chip sampling at Milos. It plans to begin 33,000 ft. of reverse-circulation drilling in August. The year’s work will total US$1.7 million, enough to satisfy the first year’s work commitment as set out in the agreement with Silver & Baryte.