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Royal Road Minerals shares rocket as it reveals deal to buy Colombian assets from AngloGold Ashanti

Royal Road said its initial focus will be on titles containing targets that can be moved to drilling as soon as possible

Signing a deal
The deal with AngloGold Ashanti was announced Tuesday

Royal Road Minerals (CVE:RYR) shares shot up Tuesday as it revealed a deal to buy Colombian exploration assets from mining major AngloGold Ashanti (JSE:ANG).

The group struck an agreement with Compañía Kedahda Ltd, an affiliate of AngloGold Ashanti to acquire Northern Colombia Holdings Ltd (NC Holdings), which owns ENC, which owns titles covering around 36,000 hectares, and the rights to acquire concessions over around 215,000 hectares in prospective mineral belts in the Nariño, Cauca and Antioquia departments of Colombia.

Shares of Royal Road surged in Toronto around 37% to $0.11.

READ THE DEEP DIVE: Royal Road Minerals acquires extensive portfolio of high-quality Colombian assets from AngloGold

The claims are grouped into two blocks -- the Southern Block, which lies contiguous with Royal Road's existing 3500 square kilometers of exploration rights in Nariño Province. There is also the Northern Block, which covers the well-known Middle Cauca Belt, a region hosting over 50 million ounces of recently discovered gold resources.

Royal Road said its initial focus will be on titles containing targets that can be moved to drilling as soon as possible.

Targets include the El Tambo intrusion-related gold project in Cauca province, where AngloGold Ashanti reported an area of dipping quartz-veins, up to three meters wide, over 3km in strike and 600 meters in total zone-width, with rock chip results returning up to 77 grams per tonne (g/t) gold.

There is also the Guinter vein project area in Antioquia, which has been mapped over six sq km and where AngloGold Ashanti drilled 10 scout diamond drill holes and reported best intersections of 56 meters at 1.1, 14 meters at 1.8 and 20 meters at 1.8 grams per tonne gold.

The title package contains numerous porphyry-style occurrences and two well-known porphyry copper and gold projects that while not drill ready, will be the short-term focus for Royal Road's social and permitting teams.

The overall acquisition cost is spread over several payments related to the delivery of certain resource targets and the achievement of production, and could come to a total of US$40mln.

Royal Road Minerals will pay around $4.6 million in cash on completing the deal,  with further payments amounting to some $35 million in total if certain milestones are reached.

The transaction is expected to close on or before the date that is 60 days from March 4 this year, subject to the approval of the TSX Venture Exchange and the other conditions.

Quick facts: Royal Road Minerals

Price: 0.275 CAD

TSX-V:RYR
Market: TSX-V
Market Cap: $71.69 m
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