Resolute to pay $12M to end Mako royalty

RESOLUTE Mining will pay US$12 million in cash and shares to cancel a 1.1% royalty payable on the first 1.4 million ounces of production from the Mako gold mine in Senegal.
Resolute to pay $12M to end Mako royalty Resolute to pay $12M to end Mako royalty Resolute to pay $12M to end Mako royalty Resolute to pay $12M to end Mako royalty Resolute to pay $12M to end Mako royalty

Resolute Mining's Mako gold mine in Senegal, West Africa

Staff reporter

The royalty has been held by 2017 by private equity firm Taurus Funds Management, which project financed the mine under former owner Toro Gold. Resolute acquired Toro and its flagship Mako mine in July 2019 for $274 million.

The terms of the royalty allowed its holder, Taurus, to demand a termination sum should Toro Gold come under new management. The figure of $12 million was calculated by multiplying future gold production with the spot price and royalty rate.

Resolute said it expects to repay the finance facilities provided by Taurus in the March quarter, while the $130 million bridge facility provided by Taurus for the Toro acquisition will be repaid by the end of January. Resolute deferred paying the royalty termination sum until the bridge facility was repaid.

The company said the agreed terms for the removal of the royalty "will greatly simplify the refinancing process".

"Acquisition of the Toro Gold royalty will boost the future cash flows received by Resolute from Mako and further enhances our exposure to higher gold prices and future exploration success. We are working to simplify the company's capital and debt structure and the termination of this external royalty on sound financial terms is value accretive for Resolute," said Resolute's managing director and CEO John Welborn.

Resolute shares closed at A$1.17 yesterday, valuing the company at $1.06 billion.






  • FREE coverage on the rapidly developing coronavirus pandemic. Visit our COVID-19 hub.
  • Latest COVID-19 Coverage: Copper deficit story dead: CRU. Read more.
  • Latest COVID-19 Coverage: Majors cautious over recovery. Read more.