Yamana Gold plans to sell a portfolio of royalty interests and the contingent payment to be received upon declaration of commercial production at the Deep Carbonates Project (DCP) at the Gualcamayo gold mine for a total consideration of $65 million to Guerrero Ventures Inc.
The consideration has been structured with a cash component of $20 million and a $45 million share position in Guerrero Ventures.
Guerrero will acquire two portfolios of precious metals royalty, stream and gold loan assets from funds related to Orion Resource Partners and Yamana for $268 million and $65 million, respectively.
Yamana’s portfolio of assets being sold include a 1% net smelter return royalty (NSR) on gold production from the Riacho dos Machados (RDM) gold mine operating in Minas Gerais, Brazil; 2% NSR on oxide gold production from the Gualcamayo gold mine operating in San Juan, Argentina, once the operation produces approximately 275,000 ounces (oz) from January 1, 2020; 1.5% NSR on production from the DCP at the Gualcamayo gold mine; $30 million cash payment receivable upon declaration of commercial production at the DCP at the Gualcamayo gold mine; and 2% NSR on production from the Suruca project in Goiás, Brazil.
Upon closing, Guerrero intends to change its corporate name to Nomad Royalty Co. Ltd. and Orion and Yamana are expected to hold approximately 77% and 13% of the outstanding shares of Nomad, respectively, on a pro forma basis.
Nomad’s combined portfolio is expected to consist of 10 royalty, stream and gold loan assets, seven of which are currently producing or expected to begin producing in 2020.
Orion’s portfolio of assets being acquired under the acquisitions consists of gold stream on the Blyvoor gold mine currently under final construction in the Witwatersrand Gold Belt, South Africa; gold stream on the operating Bonikro gold mine in Côte d’Ivoire; silver stream on the commissioning Woodlawn zinc-copper mine in New South Wales, Australia; silver stream on the operating Mercedes gold-silver mine in Sonora, Mexico; silver stream on the operating South Arturo gold mine in Nevada, USA; and gold deliveries under a gold loan made to Premier Gold Mines Ltd.
Nomad’s team will consist of Vincent Metcalfe as CEO and Joseph de la Plante as CIO.
The transaction is expected to occur during the second quarter of 2020 and is subject to standard closing conditions.