Red Rock Resources PLC (AIM:RRR) shares jumped in Friday's trade after announcing it has agreed to sell its royalty over gold production from the El Limon mine in Colombia to Soma Gold Corp, in a deal worth £1 million in cash.
The company said it will also receive 200,000 share subscription rights exercisable at C$2.00 for 36 months.
The royalty, held since 2015, has not produced payments in recent years but was expected to restart this year. It included a 3% net smelter return royalty capped at US$2 million and a further 0.5% royalty capped at $1 million.
“The sale of the royalty back to the mine owner gives Red Rock cash to extinguish liabilities and support working capital,” said chair Andrew Bell.
In London, Red Rock shares are up 15% changing hands at 0.035p.