Royal Road Minerals Ltd (CVE:RYR) (OTCMKTS:RRDMF) revealed on Wednesday a boost to the El Gualtal gold mine project in the prolific La Llanada Goldfield in Colombia with new agreements with a local company representing the informal miners there.
The project is in Royal Road's Colombian subsidiary's mining concession contract in Nariño District and the formalization agreement and related earn-in option and royalty agreements are with San Antonio, a company representing the interests of informal miners that have been carrying out small-scale mining activities at El Gualtal.
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Put simply, a new concession contract over a specific area will now be granted to San Antonio for the benefit of over 1,000 informal miners, enabling the implementation of legal and responsible mining.
In exchange, Royal Road's subsidiary ENC will receive a quarterly royalty equivalent to 3% of the doré extracted from the El Gualtal concession.
It (ENC) has also been granted the sole and exclusive right to carry out all exploration on the concession and the right to acquire 70%, subject to the completion of certain exploration milestones.
These include a minimum of 6,000 meters of drilling, underground sampling and an internal feasibility study for the concession within five years.
"We are immensely proud to have entered into the Agreements which are designed to benefit the Company, the informal miners at Gualtal, the Colombian government and other stakeholders, and quintessentially reflect the ideals and high hopes of Royal Road Minerals," noted Dr Tim Coughlin, Royal Road's president and CEO.
The deal is "in keeping" with Royal Road's commitments under terms with post-conflict cooperative ECOMUN and will achieve the policy objectives of the Colombian government's National Policy for Mining Formalization, he added.
Remarkable grade and continuity
"The El Gualtal project is remarkable in the grade and continuity of quartz-carbonate veining and is typical of the mineralization style of the La Llanada Goldfield. We very much look forward to working with our local colleagues and to revealing the full potential of this highly prospective district."
Past production at the El Gualtal gold mine may have been around 300 tonnes of hand-picked ore per day, Royal Road said.
Today, 40 adits are active and the company estimates that production from informal mining operations is currently between 100 and 150 tonnes of hand-picked ore per day.
Royal Road has carried out some rock-chip channel face sampling at the site, with results including 1.3 metres (m) at 136.5 grams per ton (g/t) gold, and 0.6m at 50.1 g/t of the yellow metal.
Royal Road Minerals is a mining company with an experienced management team and assets in Colombia and Nicaragua.
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