RNC Minerals (TSX: RNX) (“RNC” or the “Company”) is pleased to announce it has reached an agreement with Morgan Stanley Capital Group Inc. (“Morgan Stanley”) to terminate the remaining NSR royalty interests held by Morgan Stanley over a number of tenements at RNC’s Higginsville Gold Operations (HGO), located in Western Australia, for a purchase price of US$9 million in cash. This transaction, once completed, will eliminate all remaining NSR royalty obligations in respect of the affected tenements, with the exception of the mandatory Western Australia state royalty of 2.5%.
Paul Andre Huet, Chairman & CEO, commented: “We are extremely pleased to have come to an agreement with Morgan Stanley to buy-back the remaining NSR portions of the long-standing royalty at Higginsville. We see the removal of these royalties as a significant transaction for RNC shareholders that will contribute meaningfully to the further unlocking of HGO land package beyond what we have already accomplished. During the first four months of 2020, we have delivered numerous positive exploration and development updates at Higginsville to the market and we expect this trend to continue.
Today’s announcement, coupled with our purchase agreement for the Spargos Reward high-grade gold project (see RNC news release dated May 11, 2020), is expected to provide RNC with increased flexibility to prioritize optimal feed to our HGO processing facility from our growing pipeline of high quality projects.”
The purchase price of US$9 million cash will be satisfied as follows: 30% (US$2.7 million) paid immediately and the remaining 70% of the purchase price paid over 30 months (US$1.26 million every six months).
This transaction will eliminate the current 1.75% legacy NSR royalty held by Morgan Stanley on the first 10,000 ounces of gold sold per annum (up to a cumulative 110,000 ounces) and the 2% NSR royalty on ounces sold in excess of 10,000 per annum. The current participation payment arrangement with Morgan Stanley will remain in place (see RNC news release dated December 19, 2019).
About RNC Minerals
RNC is focused on growing gold production and reducing costs at its integrated Beta Hunt Gold Mine and Higginsville Gold Operations (“HGO”) in Western Australia. The Higginsville treatment facility is a low-cost 1.4 Mtpa processing plant which is fed at capacity from RNC’s underground Beta Hunt mine and open pit Higginsville mine. At Beta Hunt, a robust gold mineral resource and reserve is hosted in multiple gold shears, with gold intersections along a 4 km strike length remaining open in multiple directions. HGO is a highly prospective land package totaling approximately 1,800 square kilometers. In addition, RNC has a 28% interest in a nickel joint venture that owns the Dumont Nickel-Cobalt Project located in the Abitibi region of Quebec. Dumont contains the second largest nickel reserve and ninth largest cobalt reserve in the world. RNC has a strong Board and management team focused on delivering shareholder value. RNC’s common shares trade on the TSX under the symbol RNX. RNC shares also trade on the OTCQX market under the symbol RNKLF.