Royal Road Minerals (TSXV: RYR) announced that it has entered into formalization agreements and related earn-in option and royalty agreements with the proprietors of the La Candelaria and San Miguel informal gold mines in Colombia.
In a press release, the miner said the deal was inked by its wholly-owned subsidiary, Exploraciones Northern Colombia or ENC, under the framework of the Colombian government’s National Policy for Mining Formalization.
Unlike the majority of gold deposits in the region, the La Candelaria and San Miguel gold mines are hosted in a silicified and folded sedimentary succession
This is the second deal of its kind that Royal Road signs in the span of a week. All properties are located in the municipality of Los Andes-Sotomayor, Nariño district, within concession contract HH2-12001X held by AngloGold Ashanti, pending assignment to ENC.
Under the terms of the agreement, specific portions of the area held under concession by ENC will be returned directly to informal miners so that new concession contracts over such returned areas may be granted, enabling legal and responsible mining operations to take place.
In exchange, ENC will receive a quarterly royalty equivalent to 3% of the doré extracted from the formalized concessions and has been granted the sole and exclusive right to carry out all exploration activities on the formalized concessions and the right to acquire 70% of the formalized concessions, subject to the completion of certain exploration milestones.
“The Company has now executed four formalization agreements over promising gold operations in Nariño and there will be more to follow,” Tim Coughlin, Royal Road’s president and CEO, said in the media brief. “The cash we anticipate earning from royalties due as part of this process will, of course, be significant.”