The Australian royalty specialist company Royalco Resources Ltd (ASX: RCO) has sharpened its interest on corporate developments on the Sams Creek gold project on New Zealand’s South Island for which a new IPO is advancing.
Royalco claimed a royalty interest in a series of South Island gold projects that were originally held by Rio Tinto subsidiary CRA Exploration before being sold to Macraes Mining, a forerunner of OceanaGold Corporation.
Royalco bought Rio Tinto’s royalty right to the Reefton goldfield properties and Sams Creek and when the Globe-Progress gold mine at Reefton was opened by OceanaGold the then Melbourne-based company had a significant income from the formative years of that operation.
The company’s December quarter report said MOD Resources Ltd (ASX: MOD) which had earned an 80% interest in Sams Creek from OceanaGold had assigned its interest to a public unlisted company Condamine Resources for $A3.8 million ($NZ4.09 M). Condamine was planning an IPO for the ASX.
Royalco said Sams Creek has a JORC compliant resource of 20.5 million tonnes grading 1.54 grams/tonne gold at a 0.7 g/t cut-off grade. This includes an indicated resource of 10.1 Mt @ 1.77 g/t.
Royalco is claiming it retains a 1% royalty on the main project area of Sams Creek, though it did not detail the duration of this royalty, for on the Globe-Progress at Reefton it was a status that finished before the end of mining operations there.
The December quarter report repeated an earlier company report that Royalco was considering selling its interest in the Weeks Royalty on oil and gas production in Bass Strait, and considering selling other assets.
For the quarter, the equity in the Weeks Royalty realised $A162,261. The company said the Bass Strait royalty equity was worth $A546,000 in 2017 and was expected to be more this year.
Following major board and management changes last year, Royalco moved its head office to Sydney and undertook significant administrative rationalisations.
At the end of the quarter the company had a cash balance of $A2.137 M.
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