LONDON (dpa-AFX) - Rio Tinto plc (RTPPF.PK, RIO.L, RIO, RTNTF.PK), on Tuesday, announced that it has completed the sale of a royalty it holds on an area including the Cortez mine operational area and the Fourmile development project in Nevada to RG Royalties LLC, a direct wholly-owned subsidiary of Royal Gold Inc., for $525 million in cash.
The Cortez Royalty is a 1.2% gross production royalty on (i) the Cortez gold mine that is operated by Nevada Gold Mines, a joint venture between Barrick Gold Corp. and Newmont Corp.; and (ii) the Fourmile project which is 100% owned and operated by Barrick.
Rio Tinto further noted that it has obtained the royalty as partial consideration for the sale of its 40% interest in the Cortez Complex to Barrick in 2008. Royalty payments commence once the Cortez Complex has produced a total of 15 million ounces of gold since 2008. This is expected to occur imminently.
Rio Tinto Chief Financial Officer Peter Cunningham said: 'This transaction unlocks hidden value from our portfolio and releases cash immediately.'
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