Columbus Gold (CGT.V) has announced it sold a 1% NSR to a royalty company for proceeds of US$5M. We consider this to be a very fair price, as this consideration values the cash flows of the Paul Isnard Project at in excess of US$500M. If Columbus Gold exercises its right to reduce the royalty owned by EURO Ressources (EPA:EUR), the Paul Isnard project will have an aggregate NSR royalty of 2.8% on the first 2 million ounces produced, 1.9% on the next 3 million ounces produced, and 1% thereafter. Columbus can exercise its right to reduce the royalty for $4.2M in cash and 12.86M shares.
The name of the buyer has not been disclosed, but it’s very likely one of the usual suspects such as Sandstorm Gold (SSL.TO, NYSEMKT:SAND) or Premier Royalty (NSR.TO).
Columbus Gold currently has C$8.5M in cash, so they are fully funded for this year’s exploration efforts.
> Click here to read the press release
Disclosure: The author holds a long position in Columbus Gold. Please see our disclaimer for current positions.
