Montage Gold (TSXV: MAU) has cut a royalty on its Kone project in half as of this morning, after buying back a 1% NSR on the project.
The royalty relates to properties previously held under Mankono Exploration, which was acquired by Montage from Barrick Gold and Endeavour Gold two years ago. As part of that purchase a 1.4% and 0.6% net smelter return royalty were assigned to Barrick and Endeavour, respectively, which were eligible for a 50% buyback at a cost of US$10 million. That option was to be exercised by the second anniversary of the project being acquired.
The purchase as a result reduces the royalties owing to Barrick and Endeavour to 0.7% and 0.3%, respectively.
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The NSR currently applies to an 893 square kilometre area of the project, which consists of the Gbongogo, Sisseple and Sissedougou exploration licenses. A majority of that Gbongogo license is said to now be covered by a mining permit for the Kone project, while the remainder currently sits under an exploration license.
“Given the strong liquidity sources recently secured, we are pleased to have the strategic and financial flexibility to exercise our right to repurchase a 1.0% royalty on our Koné project, as part of our prudent capital allocation strategy,” commented Martino De Ciccio, CEO of Montage.
Montage Gold last traded at $2.12 on the TSX Venture.
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