Agnico Eagle increases Royal Road stake to 19.9%
Typical stacked gold-bearing quartz-carbonate veins at the Royal Road La Golondrina property in Narino Province, Colombia. Source: Royal Road Minerals Ltd.
Royal Road Minerals Ltd. [RYR-TSXV; RRDMF-OTC] said Friday May 24 that it has closed a previously announced private placement that raised $8 million from an offering of 40 million ordinary shares priced at 20 cents each. Proceeds are earmarked to fund the acquisition of assets in Colombia.
As part of the offering, the company issued 26.1 million shares to Agnico Eagle Mines Ltd. [AEM-TSX, NYSE]. Agnico said it now owns 42.5 million ordinary shares of Royal Road, representing 19.9% of the outstanding shares. That’s up from the previous holding of 9.4%.
Agnico-Eagle is a Canadian gold mining company with operations in Canada, Finland and Mexico. It said it bought the Royal Road shares for investment purposes, and may acquire more. Agnico has entered into an investor rights agreement with Royal Road that will allow it to maintain its ownership position by participating in future financings.
Agnico will also have the right to nominate up to two Royal Road board members.
Royal Road advanced on the news, rising 8.1% or $0.015 to 20 cents. The shares are trading in a 52-week range of $0.06 and 21 cents.
Agnico-Eagle is part of a shareholder group that includes Barrick Gold Corp. [ABX-TSX; GOLD-NYSE]. Back in January, 2018, Barrick acquired almost 9.9 million shares of Royal Road in a $1.6 million non-brokered private placement priced at 16 cents a share.
As a result, Barrick said it owned 20.9 million shares or a 12.55 stake.
Royal Road Minerals was founded in 2010 by the original founders and shareholders of Lydian International Ltd. Whilst at Lydian, the team discovered, financed and developed the 5 million-ounce Amulsar Gold deposit in Armenia.
The company is currently the largest license application owner in the highly prospective province of Narino in Colombia, which is close to Colombia’s southern border with Ecuador, and widely known for its gold and porphyry copper-gold potential. The company said it has in excess of 400,000 hectares in the application to concession contract process.
Of those applications, Royal Road said roughly 200,000 hectares have passed the initial phase of conversion to concession contracts, meaning that they have been approved by local majors and counselors.
Narino hosts numerous gold occurrences and one of the largest alluvial goldfields in Colombia. Narino is also widely considered to be one of the last remaining highly prospective and underexplored regions of the Andes.
The company recently added to its portfolio in Colombia by acquiring a British Virgin Islands entity owning AngloGold Ashanti Ltd. [AU-NYSE; AGG-ASX; ANG-JSE] exploration assets in Colombia. Those assets include mining concession agreements covering 36,000 hectares of land, and rights to acquire mining concessions covering 215,000 hectares in prospective mineral belts in the Narino, Cauca and Antioquia departments of Colombia.
Royal Road is also active in Nicaragua after acquiring the interests of Caza Gold Corp. in that country, including the Los Andes porphyry copper-gold and Piedra Iman iron-oxide copper-gold prospects.
The company executed a 50-50 strategic exploration alliance with Hemco/Mineros, in which both companies combine exploration assets and explore in Nicaragua on a 50-50 basis. This arrangement also provides Royal Road with access to the highly prospective Golden Triangle region of Northeastern Nicaragua.