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(Alliance News) - Resolute Mining Ltd on Tuesday said it has bought back a royalty held by a financier for the Mako gold project in Senegal.
Taurus Funds Management Pty Ltd held a 1.1% revenue royalty on the gold project's first 1.1 million ounces of production. To remove this obligation, Resolute will pay USD12 million to Taurus, which can choose whether it wants cash or Resolute shares as consideration.
The deal, Resolute said, will boost the company's cash flow from Taurus and is part of a plan to remove non-government royalty agreements from its projects.
The royalty had originally been set up in 2017 when Mako was owned by Toro Gold Ltd. Resolute bought Toro in July last year for USD270 million.
"Acquisition of the Toro gold royalty will boost the future cash flows received by Resolute from Mako and further enhances our exposure to higher gold prices and future exploration success," said Resolute Managing Director & Chief Executive John Welborn.
"We are working to simplify the company's capital and debt structure and the termination of this external royalty on sound financial terms is value accretive for Resolute."
Resolute shares were 1.2% lower on Tuesday in London at 60.50 pence each.
By George Collard; georgecollard@alliancenews.com
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