Royal Gold To Buy New Royalties On Serrote, Santa Rita Mines In Brazil For $250 Mln Cash

(RTTNews) - Royal Gold, Inc. (RGLD) said on Monday that its unit RG Royalties, LLC, has committed with ACG Acquisition Company Ltd. or ACG, to buy new royalty interests on the producing Serrote and Santa Rita mines in Brazil, for $250 million cash.

Bill Heissenbuttel, CEO of Royal Gold, said: "… The royalties will provide predominantly precious metals revenue on producing mines that we believe have excellent long-term potential… and are located in a mining-friendly jurisdiction. These assets, management team and jurisdiction will fit well within our existing portfolio."

Royal Gold expects to fund the transaction by cash as well as around $200 million of its revolving credit facility. The deal is expected to be closed by the end of July.

The royalty interests consist of a gold royalty on the Serrote mine, a gold, platinum and palladium royalty on the Santa Rita mine, and a copper and nickel royalty on both the Serrote and Santa Rita mines. ACG has agreed to acquire the Serrote and Santa Rita mines from funds advised by Appian Capital Advisory LLP, and Royal Gold has agreed to pay the cash consideration for the royalty interests upon the closing of the transaction between ACG and Appian.

Post acquisition, ACG will be renamed ACG Electric Metals.