TORONTO, Dec. 19, 2019 /CNW/ - RNC Minerals (TSX: RNX)
("RNC" or the "Company") is pleased to announce it has restructured
the current royalty held by Morgan Stanley Capital Group Inc.
("Morgan Stanley") over a number of tenements at its
Higginsville Gold Operations (HGO) located in Western Australia.
Prior to these amendments, the royalty on these tenements was
comprised of a 1.75% NSR plus a 50% participation payment on the
difference between realized gold price and A$1,340 per ounce (the "legacy rate").
The restructured royalty provides for a flat 2% NSR after
payment of an adjusted legacy rate on the first 10,000 gold ounces
sold per annum.
The details of the restructured royalty are as follows:
- An adjusted legacy royalty on the first 10,000 ounces sold per
annum comprised of a 1.75% NSR plus a reduced 27.5% participation
payment (reduced from 50% previously) on the difference between
realized gold price and A$1,340 per
ounce. This legacy rate will apply for 11 years (or to a cumulative
total of 110,000 ounces).
- A flat 2% NSR on ounces sold in excess of 10,000 per annum,
which will become payable after the first 37,500 ounces are sold
from HGO production.
Paul Andre Huet, Chairman &
CEO, commented: "We are pleased to have reached a mutually
beneficial agreement with Morgan Stanley to restructure the terms
of this royalty. This revised structure addresses in a meaningful
way RNC's strategic objective for additional economic incentive to
mine the gold resources on these tenements. We are extremely
pleased to have developed an arrangement that we expect will allow
us to unlock significant value for both parties. The new royalty
will allow us to develop these tenements, thereby providing us with
additional flexibility to fill our Higginsville mill with material
from our extensive pipeline of open pits already identified."
The restructured royalty will come into effect on January 1, 2020 and opens the door for RNC to
access gold resources on tenements previously seen as uneconomic.
The benefits of the revised arrangements will begin to flow through
over the coming quarters with drilling and mining activities to
commence in specific areas immediately.
About RNC Minerals
RNC is focused on growing gold production and reducing costs at
its integrated Beta Hunt Gold Mine and Higginsville Gold Operations
("HGO") in Western Australia. Part
of HGO, the Higginsville mill is a low-cost 1.4 Mtpa processing
facility which is fed at capacity from RNC's underground Beta Hunt
mine and open pit Higginsville mine. At Beta Hunt, a robust mineral
resource is hosted in multiple gold shears, with gold intersections
along a 4 km strike length remaining open in multiple directions.
HGO has a substantial historical gold resource and highly
prospective land package totaling approximately 1,800 square
kilometers. In addition, RNC has a 28% interest in a nickel joint
venture that owns the Dumont Nickel-Cobalt Project located in the
Abitibi region of Quebec. Dumont
contains the second largest nickel reserve and ninth largest cobalt
reserve in the world. RNC has a strong Board and management team
focused on delivering shareholder value. RNC's common shares trade
on the TSX under the symbol RNX. RNC shares also trade on the OTCQX
market under the symbol RNKLF.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information"
including without limitation statements relating to the liquidity
and capital resources of RNC, production guidance and the potential
of the Beta Hunt Mine, Higginsville Gold Operation and Dumont
Nickel Project.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of RNC to be materially different from
any future results, performance or achievements expressed or
implied by the forward-looking statements. Factors that could
affect the outcome include, among others: future prices and the
supply of metals; the results of drilling; inability to raise the
money necessary to incur the expenditures required to retain and
advance the properties; environmental liabilities (known and
unknown); general business, economic, competitive, political and
social uncertainties; results of exploration programs; accidents,
labour disputes and other risks of the mining industry; political
instability, terrorism, insurrection or war; or delays in obtaining
governmental approvals, projected cash operating costs, failure to
obtain regulatory or shareholder approvals. For a more detailed
discussion of such risks and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements, refer to RNC's filings with
Canadian securities regulators, including the most recent Annual
Information Form, available on SEDAR at www.sedar.com.
Although RNC has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. Forward-looking
statements contained herein are made as of the date of this news
release and RNC disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
Cautionary Statement Regarding the Beta Hunt Mine and
Higginsville
The decision to produce at the Beta Hunt Mine was not based
on a feasibility study of mineral reserves, demonstrating economic
and technical viability, and, as a result, there may be an
increased uncertainty of achieving any particular level of recovery
of minerals or the cost of such recovery, which include increased
risks associated with developing a commercially mineable deposit.
Historically, such projects have a much higher risk of economic and
technical failure. There is no guarantee that anticipated
production costs will be achieved. Failure to achieve the
anticipated production costs would have a material adverse impact
on SLM's cash flow and future profitability. Readers are cautioned
that there is increased uncertainty and higher risk of economic and
technical failure associated with such production decisions. It is
further cautioned that mineral resources are not mineral reserves
and do not have demonstrated economic viability.
A production decision at the Higginsville gold operations was
made by previous operators of the mine, prior to the completion of
the acquisition of the Higginsville gold operations by RNC and RNC
made a decision to continue production subsequent to the
acquisition. This decision by RNC to continue production and, to
the knowledge of RNC, the prior production decision were not based
on a feasibility study of mineral reserves, demonstrating economic
and technical viability, and, as a result, there may be an
increased uncertainty of achieving any particular level of recovery
of minerals or the cost of such recovery, which include increased
risks associated with developing a commercially mineable deposit.
Historically, such projects have a much higher risk of economic and
technical failure. There is no guarantee that anticipated
production costs will be achieved. Failure to achieve the
anticipated production costs would have a material adverse impact
on the Corporation's cash flow and future profitability. Readers
are cautioned that there is increased uncertainty and higher risk
of economic and technical failure associated with such production
decisions.
SOURCE RNC Minerals