Rio Tinto has completed the sale of a royalty it holds on the Cortez Complex, which includes the Cortez mine operational area and the Fourmile development project in Nevada.
Rio sold the royalty to RG Royalties, a wholly-owned subsidiary of Royal Gold Inc., in a deal valued at $525 million.
The Cortez Royalty is a 1.2% gross production royalty on the Cortez gold mine that is operated by Nevada Gold Mines, a joint venture between Barrick Gold Corporation and Newmont Corporation; and the Fourmile project which is 100% owned and operated by Barrick.
Rio Tinto obtained the royalty as partial consideration for the sale of its 40% interest in the Cortez Complex to Barrick in 2008.
According to the company’s statement, royalty payments commence once the Cortez Complex has produced a total of 15 million ounces of gold since 2008, which is expected to occur “imminently”.
Commenting on the transaction, Rio Tinto Chief Financial Officer Peter Cunningham said: “This transaction unlocks hidden value from our portfolio and releases cash immediately.”
