Royal Road Minerals (TSXV: RYR) announced that its 100%-owned Colombian subsidiary, Exploraciones Northern Colombia SAS, entered into a formalization agreement and a related earn-in option and royalty agreement with the owners of the La Esmeralda gold mine, an informal gold operation located in Colombia’s Nariño district.
In a press release, Royal Road said that La Esmeralda is located within concession contract HH2-12001X, held by AngloGold Ashanti, pending assignment to ENC pursuant to a stock purchase agreement signed in March last year.
Mining at La Esmeralda was suspended by regulatory authorities in 2016. There are no reliable records of previous production
The miner also explained that all the agreements were negotiated and entered into under the framework of the Colombian government’s National Policy for Mining Formalization.
“Under the terms of the formalization agreement, a specific portion of the area under the concession will be returned by the company so that a new concession contract over such returned area may be granted to La Esmeralda, enabling legal and responsible mining operations to resume at the La Esmeralda gold mine,” Royal Road’s media brief states.
The idea of returning a portion of the concession is to allow informal miners to resume activities as long as they observe environment and workplace health and safety regulations.
According to the company, in exchange, Exploraciones Northern Colombia will receive a quarterly royalty equivalent to 3% of the doré extracted from the La Esmeralda concession and has been granted the sole and exclusive right to carry out all exploration activities on the property and the right to acquire a 70% interest, subject to the completion of certain exploration milestones.
Located in the municipality of Los Andes-Sotomayor, La Esmeralda is a shallow-dipping, quartz-carbonate vein and vein-stockwork system located and hosted in the ‘roof-zone’ and adjacent contact zone of a tonalite intrusion and overlying and adjacent carbonaceous shale sequences. The mine is one of many similar-style gold occurrences in the prolific La Llanada goldfield.