Rio Tinto completes sale of Cortez Gold Royalty for $525 million in cash

Rhea-AI Summary

Rio Tinto has finalized the sale of a 1.2% gross production royalty on the Cortez mine and Fourmile project in Nevada to RG Royalties LLC, a wholly-owned subsidiary of Royal Gold Inc., for $525 million in cash. This move is expected to unlock hidden value and provide immediate cash flow, with royalty payments set to commence shortly after the Cortez Complex produces 15 million ounces of gold since 2008. The CFO emphasizes the value this transaction brings to the company's portfolio.

Positive

• Sale of a 1.2% gross production royalty for $525 million provides immediate cash flow.
• Transaction unlocks hidden value from Rio Tinto's portfolio.

Negative

• None.

LONDON--(BUSINESS WIRE)-- Rio Tinto has completed the sale of a royalty it holds on an area including the Cortez mine operational area and the Fourmile development project in Nevada (the “Cortez Complex”) to RG Royalties LLC, a direct wholly-owned subsidiary of Royal Gold Inc., for $525 million in cash.

The Cortez Royalty is a 1.2%¹ gross production royalty on (i) the Cortez gold mine that is operated by Nevada Gold Mines, a joint venture between Barrick Gold Corporation (“Barrick”) and Newmont Corporation; and (ii) the Fourmile project which is 100% owned and operated by Barrick. Rio Tinto obtained the royalty as partial consideration for the sale of its 40% interest in the Cortez Complex to Barrick in 2008. Royalty payments commence once the Cortez Complex has produced a total of 15 million ounces of gold since 2008. This is expected to occur imminently.

Rio Tinto Chief Financial Officer Peter Cunningham said: “This transaction unlocks hidden value from our portfolio and releases cash immediately.”

This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.

riotinto.com

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¹ Royalty calculated as 1.2% at current gold prices. The royalty rate is determined based on a scale from 0% at gold prices less than US$400/oz up to 3% at gold prices greater than $900/oz, calculated on 40% of the production from the undivided Cortez Complex land package.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005904/en/

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Source: Rio Tinto

FAQ

What is the significance of Rio Tinto's royalty sale involving the Cortez Complex?

Rio Tinto sold a 1.2% gross production royalty on the Cortez Complex for $525 million, unlocking immediate cash flow and value.

When will Rio Tinto start receiving royalty payments from the Cortez Complex?

Royalty payments will commence once the Cortez Complex produces a total of 15 million ounces of gold, which is expected to occur soon.

How much did Rio Tinto receive from the sale of the royalty on the Cortez mine?

Rio Tinto received $525 million from the sale of the 1.2% royalty on the Cortez mine.

Who acquired the royalty from Rio Tinto?

The royalty was acquired by RG Royalties LLC, a subsidiary of Royal Gold Inc.