The group struck an agreement with Compañía Kedahda Ltd, a subsidiary of global gold miner AngloGold Ashanti, to acquire Northern Colombia Holdings Ltd, a company holding around 36,000 hectares in addition to the rights to acquire concessions over around 215,000 hectares in prospective mineral belts in the Nariño, Cauca and Antioquia departments of Colombia.
The new acquisition significantly increases the junior explorer’s portfolio of high-potential exploration assets and provides numerous options for joint venture and cash-generating transactions in Colombia.
It also provides the Toronto-based company with significant exploration upside throughout the South American country.
Underexplored land package
There are 16 currently identified individual gold project areas located within the title package and numerous underexplored areas that are believed to host significant geologic potential, Royal Road said in a statement.
The claims are grouped into two blocks. The Southern Block lies contiguous with Royal Road's existing 3500 square kilometres of exploration rights in Nariño Province, while the Northern Block 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.
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 Roads will pay around US$4.6 million in cash on completing the deal, with further payments amounting to some $US35 million in total if certain milestones are reached.
Shares of Royal Road slipped 2.7% in Toronto on Friday afternoon at C$0.18.