Empress Royalty Corp (CVE:EMPR) (OTCQB:EMPYF) announced Monday that it has added a new royalty on a prospective gold project in Mozambique.
The royalty company revealed it acquired a 2.25% production royalty on the Manica gold project owned by Mutapa Mining & Processing LDA (MMP) for US$2 million.
Manica is located in the Odzi-Mutare-Manica greenstone belt and comprises several deposits on Xtract Resources PLC’s (LON:XTR) (FRA:R9XN) mining concession licence 3990C, which includes four deposits. The main deposit, Fair Bride, has a SAMREC-compliant resource statement that Empress is currently in the process of updating to NI 43-101 requirements.
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MMP and Xtract have entered into a collaboration and profit-share arrangement, whereby MMP will build, finance and operate a carbon-in-leach plant to process ore mined from Xtract's concession, Empress told shareholders.
Empress CEO Alexandra Woodyer Sherron said that the royalty demonstrates the value of the company’s strategic partners, which in this case is Endeavour Financial.
"We are pleased to announce Empress has completed its second near-term cash producing investment with the royalty on MMP's Manica gold project," Woodyer Sherron said in a statement. "This is the first investment in an African royalty which originated from the relationship with Endeavour Financial, demonstrating the value of Empress' strategic partners."
Under the term sheet signed with MMP, Empress is acquiring a royalty on gold sales from Manica for an aggregate consideration of US$2 million. Payments to Empress under the agreement are based on 2.25% of the revenues generated from the sale of gold from the project until a total of 95,000 ounces of gold is sold. Afterwards, the percentage will reduce to 0.75% and continue into perpetuity.
The royalty is secured by a first ranking security interest in certain assets of MMP, according to a statement. Funding of the consideration by Empress is subject to conditions precedent to closing, typical for a transaction of this nature and is expected to take place in early March, the company added.
Vancouver-based Empress has a portfolio of 15 gold royalties and is actively focused on finding industry partners with development and production stage projects, who require additional non-dilutive capital.
Contact Angela at angela@proactiveinvestors.com
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