Friday, 27th October 2006 (2336 views)

Royal Gold has spent $3.3 million (£1.7 million) on a sliding-scale smelter return from Nevada Star Resource (NSR), the gold miner has announced.

Occuring in November, should customary conditions be satisfied, the NSR royalty on the Gold Hill deposit in Nevada, America, will yield between one and two per cent, dependent on a gold price in relation to $350 per ounce.

One per cent is paid when the price of gold falls below $350 an ounce and this rises to two per cent should the gold price breach $350 per ounce.

Round Mountain Gold currently controls the deposit and as a result the NSR royalty will have a cap of $10 million implemented on it, as the royalty can be purchased by Round Mountain Gold for this figure.

Tony Jensen, Royal Gold's president and chief executive officer, stated: "We are pleased to acquire this royalty position that is located near the prolific Round Mountain mine, which is the fourth largest gold mine in Nevada."

"This new acquisition will complement our existing portfolio and brings us another royalty in Nevada," Mr Jensen added.

The deal is subject to a minimum royalty fee of $100,000 per year, Royal Gold announced.

 

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