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Royal Gold (RGLD) To Buy Brazilian Mine Royalties for $250M
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Royal Gold, Inc. (RGLD - Free Report) announced it has entered into an agreement with ACG Acquisition Company Ltd. to acquire new royalty interests on the producing Serrote and Santa Rita mines in Brazil.
The deal is fixed at cash consideration of $250 million, subject to closing conditions.
Royal Gold expects to receive about 8,000 GEOs from May 1 2023 to the end of the year. It anticipates an annual average of roughly 14,000 GEOs from 2024 to 2028.
For the first five years at current spot prices, the Royalties are projected to generate a revenue mix weighted towards precious metals, which includes an estimated mix of 60% gold, 25% platinum and palladium, 10% nickel, and 5% copper.
Royal Gold will get gold royalties from the Serrote mine, while the Santa Rita mine will provide it with gold, platinum, and palladium. The company will also receive royalties for copper and nickel from both locations.
Both mines are currently owned by Appian Capital Advisory LLP. ACG has agreed to acquire the Serrote and Santa Rita mines, which is expected to occur by the end of July 2023, after the satisfaction of closing conditions.
Royal Gold will pay AGC the cash payment for the royalty interests prior to the completion of the transition between AGC and Appian.
In the March-end quarter, RGLD reported adjusted earnings per share of 96 cents, beating the Zacks Consensus Estimate of 94 cents. The bottom line, however, declined 3% year over year.
The company projects stream segment sales of 320,000-345,000 GEOs for 2023.
Price Performance
In the past year, shares of Royal Gold have gained 10.2% compared with the industry’s growth of 7.9%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Royal Gold currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Piedmont Lithium’s earnings per share is pegged at $6.29 for 2023. Earnings estimates have been revised 62.9% upward in the past 60 days. PLL has gained 26.5% in a year.
The Zacks Consensus Estimate for Franco-Nevada’s fiscal 2023 earnings per share is pegged at $3.51. Earnings estimates have moved 9.3% north in the past 60 days. FNV has a trailing four-quarter earnings surprise of 2.8%, on average. Its shares have gained 3.4% in the past year.
The Zacks Consensus Estimate for Gold Fields’ fiscal 2023 earnings per share is pegged at $1.01. Earnings estimates have moved 6.3% north in the past 60 days. GFI’s shares have gained 65.7% in the past year.
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Royal Gold (RGLD) To Buy Brazilian Mine Royalties for $250M
Royal Gold, Inc. (RGLD - Free Report) announced it has entered into an agreement with ACG Acquisition Company Ltd. to acquire new royalty interests on the producing Serrote and Santa Rita mines in Brazil.
The deal is fixed at cash consideration of $250 million, subject to closing conditions.
Royal Gold expects to receive about 8,000 GEOs from May 1 2023 to the end of the year. It anticipates an annual average of roughly 14,000 GEOs from 2024 to 2028.
For the first five years at current spot prices, the Royalties are projected to generate a revenue mix weighted towards precious metals, which includes an estimated mix of 60% gold, 25% platinum and palladium, 10% nickel, and 5% copper.
Royal Gold will get gold royalties from the Serrote mine, while the Santa Rita mine will provide it with gold, platinum, and palladium. The company will also receive royalties for copper and nickel from both locations.
Both mines are currently owned by Appian Capital Advisory LLP. ACG has agreed to acquire the Serrote and Santa Rita mines, which is expected to occur by the end of July 2023, after the satisfaction of closing conditions.
Royal Gold will pay AGC the cash payment for the royalty interests prior to the completion of the transition between AGC and Appian.
In the March-end quarter, RGLD reported adjusted earnings per share of 96 cents, beating the Zacks Consensus Estimate of 94 cents. The bottom line, however, declined 3% year over year.
The company projects stream segment sales of 320,000-345,000 GEOs for 2023.
Price Performance
In the past year, shares of Royal Gold have gained 10.2% compared with the industry’s growth of 7.9%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Royal Gold currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Piedmont Lithium Inc. (PLL - Free Report) , Franco-Nevada (FNV - Free Report) , and Gold Fields Limited (GFI - Free Report) . PLL and FNV currently flaunt a Zacks Rank #1 (Strong Buy), and GFI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Piedmont Lithium’s earnings per share is pegged at $6.29 for 2023. Earnings estimates have been revised 62.9% upward in the past 60 days. PLL has gained 26.5% in a year.
The Zacks Consensus Estimate for Franco-Nevada’s fiscal 2023 earnings per share is pegged at $3.51. Earnings estimates have moved 9.3% north in the past 60 days. FNV has a trailing four-quarter earnings surprise of 2.8%, on average. Its shares have gained 3.4% in the past year.
The Zacks Consensus Estimate for Gold Fields’ fiscal 2023 earnings per share is pegged at $1.01. Earnings estimates have moved 6.3% north in the past 60 days. GFI’s shares have gained 65.7% in the past year.