Royal Gold, Inc. (RGLD - Free Report) announced that it will acquire a 3.75% net value royalty (“NVR”) covering a considerable area of Barrick Gold Corporation’s Cortez gold mine, including the Crossroads deposit from a private party seller. Royal Gold will pay $70 million to the seller.
Royal Gold’s interests at Cortez Crossroads will comprise of a 4.37% NVR and a 5% sliding scale Gross Smelter Return (“GSR”) royalty at the current gold price, after the acquisition. Royal Gold’s interest on production from Pipeline, South Pipeline and portions of the Gap deposits consists of a 4.76% NVR and a 5% GSR royalty at the current gold price.
Royal Gold created its first royalty at Cortez and it forms an important property for the company. The company feels that with additional contribution from Crossroads, which has an estimated mine life of about 9 years, Cortez will become a significant contributor for Royal Gold again in the near future.
Royal Gold plans to finance the acquisition from its revolving credit facility. After concluding the acquisition, the company anticipates that it will have about $305 million available and $345 million outstanding under the facility.
As of Dec 31, 2015, proven and probable reserves subject to Royal Gold’s interests at Cortez were estimated at 3.7 million ounces, including around 3 million ounces at Crossroads.
Royal Gold reported net income attributable to stockholders of $20.4 million, or 32 cents per share, in fiscal fourth-quarter 2016 (ended Jun 30, 2016) compared with net income of $14.8 million, or 23 cents per share, in the year ago quarter.
Royal Gold’s revenues were $94.1 million for the fourth quarter, up 27.9% year over year.
Royal Gold currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining space include New Gold, Inc. (NGD - Free Report) and Newmont Mining Corporation (NEM - Free Report) , both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Royal Gold, Inc. (RGLD - Free Report) announced that it will acquire a 3.75% net value royalty (“NVR”) covering a considerable area of Barrick Gold Corporation’s Cortez gold mine, including the Crossroads deposit from a private party seller. Royal Gold will pay $70 million to the seller.
Royal Gold’s interests at Cortez Crossroads will comprise of a 4.37% NVR and a 5% sliding scale Gross Smelter Return (“GSR”) royalty at the current gold price, after the acquisition. Royal Gold’s interest on production from Pipeline, South Pipeline and portions of the Gap deposits consists of a 4.76% NVR and a 5% GSR royalty at the current gold price.
Royal Gold created its first royalty at Cortez and it forms an important property for the company. The company feels that with additional contribution from Crossroads, which has an estimated mine life of about 9 years, Cortez will become a significant contributor for Royal Gold again in the near future.
Royal Gold plans to finance the acquisition from its revolving credit facility. After concluding the acquisition, the company anticipates that it will have about $305 million available and $345 million outstanding under the facility.
As of Dec 31, 2015, proven and probable reserves subject to Royal Gold’s interests at Cortez were estimated at 3.7 million ounces, including around 3 million ounces at Crossroads.
Royal Gold reported net income attributable to stockholders of $20.4 million, or 32 cents per share, in fiscal fourth-quarter 2016 (ended Jun 30, 2016) compared with net income of $14.8 million, or 23 cents per share, in the year ago quarter.
Royal Gold’s revenues were $94.1 million for the fourth quarter, up 27.9% year over year.
Royal Gold currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining space include New Gold, Inc. (NGD - Free Report) and Newmont Mining Corporation (NEM - Free Report) , both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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