Denver-based royalty company
Royal Gold also plans to offer High Desert’s minority shareholders equivalent consideration for their shares.
High Desert, a Nevada-based gold royalty and exploration company, owns a 2% net smelter return royalty in a large portion of
Newmont recently gave the green light to the co-development of Leeville and the neighbouring Gold Quarry South Layback mine in Nevada.
The high-grade, underground Leeville mine will cost around US$180 million to build, with the first gold pour slated for 2006. At a mining rate of about 3,500 tons per day, the mine should produce an average of 450,000-500,000 oz. per year, or 4 million oz. over a mine life of at least seven years.
High Desert also holds a 1% net smelter return royalty on the SJ claims, which cover a large part of
In addition, the company has a portfolio of gold exploration properties and royalties on non-producing gold properties in Nevada.
The deal is subject to due diligence, final documentation and regulatory approval.
Royal finished the year ended June 30, with a record profit of US$10.7 million (or US59 per share) on revenue of US$12.3 million, including a US$6.8-million gain on deferred taxes. In the previous fiscal year, the company made US$1.1 million on revenue of US$6 million. Royal’s operating income was significantly higher, at US$5.1 million, compared with US$927,752 the year before.
Royal has had great success raising capital over the past few months: In July, the company raised US$6.9 million by placing, with a single institution, 500,000 shares priced at US$13.75 apiece; in early September, Royal raised an additional US$7.3 million by selling a second block of 500,000 shares priced at US$14.50 each.
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