Royal Road Minerals Limited (CVE:RYR) (OTCMKTS:RRDMF) (FRA:RLU) announced Monday plans to sell its entire 50% interest in the Luna Roja Project in Nicaragua to Mineros SA.
The Luna Roja Project comprises the Monte Carmelo I and Monte Carmelo II mining concessions. It is currently jointly owned and operated by Royal Roads and Hemco-Nicaragua SA, a wholly-owned subsidiary of Mineros.
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Under the terms of the definitive agreement, Royal Roads said it has agreed to sell and Mineros agreed to purchase the company’s 50% interest in the project on the following key terms:
- Mineros will pay a purchase price of US$22.5 million payable in cash on the closing of the proposed transaction, plus a 1.25% net smelter royalty on all future mineral production from the Monte Carmelo I and Monte Carmelo II mining concessions; and
- Royal Roads will invest US$7.5 million over a five-year period in exploration joint ventures carried out by it and Mineros.
The transaction is expected to close on or around May 21, 2021. The Strategic Alliance Agreement will continue in effect with respect to the company’s other projects in Nicaragua, including its Caribe Project and other projects.
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