- Ero Copper (ERO) announced it has entered a streaming agreement with Royal Gold on the NX Gold Mine
- The Precious Metals Purchase Agreement is with Royal Gold subsidiary, RGLD Gold AG
- The NX Gold Mine is located in Mato Grosso, Brazil
- The deal is worth a total of US$110 million, subject to certain performance conditions
- Ero Copper is up 4.05 per cent, trading at C$26.48 at 1:58 pm ET
Ero Copper (ERO) announced it has entered a streaming agreement with Royal Gold on the NX Gold Mine.
The Precious Metals Purchase Agreement is with Royal Gold subsidiary, RGLD Gold AG.
The NX Gold Mine is located in Mato Grosso, Brazil.
The deal is worth a total of US$110 million for the purchase of 25-per-cent of gold produced until 93,000 ounces of gold have been delivered, decreasing to 10-per-cent of gold produced over the remaining life of mine.
Royal Gold will make an upfront cash payment of $100-million and an additional amount of up to $10 million subject to certain performance conditions related to planned exploration drilling and increases.
Proceeds from the transaction will eenhance Ero’s balance sheet strength and flexibility, offering further support to execute upon the Company’s growth strategy including advancing the Boa Esperança Project.
“In just over three years, the NX Gold Mine has developed within our organization from an asset held for sale with no mineral reserves or resources to a low-cost producer with a long-term mine life, featuring significant exploration potential and excess mill capacity to be utilized with continued exploration success. Our partnership with Royal Gold on the NX Gold Mine is an important vote of confidence on the quality of the asset and its exploration potential. This transaction unlocks considerable upfront value for Ero’s shareholders while retaining upside as we continue to grow and develop the mine.
The proceeds from this transaction, paired with our US$84 million cash position at the end of the first quarter, leave us extremely well-positioned to deliver on all of our core growth objectives, including (i) increasing high-margin copper production at the MCSA Mining Complex, (ii) increasing gold production and (iii) extending mine life at the NX Gold Mine and advancing the Boa Esperança Project,” said Ero Copper CEO David Strang.
Vancouver-based Ero Copper is focused on copper production growth from the MCSA Mining Complex located in Bahia State, Brazil. The company’s primary asset is a 99.6 per cent interest in the Brazilian copper mining company, MCSA, 100 per cent owner of the MCSA Mining Complex.
Ero Copper is up 4.05 per cent, trading at C$26.48 at 1:58 pm ET.
