Royal Gold ( NASDAQ: RGLD ) said on Tuesday it paid $525M to acquire a sliding-scale gross royalty on an area including the Cortez mine and Fourmile development project in Nevada from Rio Tinto's ( NYSE: RIO ) Kennecott Royalty subsidiary.
The area in the Cortez complex is owned or controlled by Nevada Gold Mines, a joint venture between Barrick Gold ( GOLD ) and Newmont ( NEM ), except for the Fourmile development, which is fully owned by Barrick.
Royalty payments start once the Cortez complex has produced a total of 15M oz. of gold, which is expected to occur by this year's Q3 or Q4.
"This is the largest of several recent transactions that add significant scale, duration and optionality to the Royal Gold portfolio," Royal Gold ( RGLD ) President and CEO Bill Heissenbuttel said.
Royal Gold's ( RGLD ) valuation is "very attractive, and streamers tend to offer outperforming returns over 'normal' gold miners and the price of gold, Leo Nelissen writes in a bullish analysis posted recently on Seeking Alpha .
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Royal Gold buys Cortez mine royalty from Rio Tinto in $525M deal