Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF) announced Tuesday that it will exercise its right to purchase 50 per cent of the Production Royalty, 1 per cent Net Smelter Return, for US$2 million from Triple Flag Precious Metals Corp. (TSX: TFPM) (NYSE: TFPM).
This move will reduce the existing royalty to a 1 per cent NSR at Calibre’s 100 per cent owned Eastern Borosi project.
The type of royalty entitles the royalty holder to a percentage of the minerals produced at a mine.
In this case, the Production Royalty is a 1 per cent Net Smelter Return (NSR) on the Eastern Borosi project, which means that Triple Flag Precious Metals is entitled to 1 per cent of the net smelter returns from the mine.
By purchasing 50 per cent of the Production Royalty from Triple Flag Precious Metals for US$2 million, Calibre will reduce the existing royalty to a 1 per cent NSR.
This means that Calibre will have a 50 per cent interest in the Production Royalty and will be entitled to 50 per cent of the net smelter returns from the mine. The purchase will also reduce Triple Flag’s interest in the Production Royalty to 50 per cent.
“I am pleased with the progress being made at the Eastern Borosi Mine with the team being on time and on budget with the start of our high-grade open pit mining operation,” said Calibre CEO Darren Hall.
“We believe there is excellent potential to expand resources and make new discoveries that will provide an additional runway for future gold production growth,” he added.
Based on demonstrated execution and upside growth potential at Eastern Borosi, it makes good sense to exercise this right given the anticipated high return on investment.”
Read more: Calibre Mining starts drilling high-grade gold Eastern Borosi open pit
Read more: Calibre Mining reports record gold production in Q1 2023
Calibre recently started exploration in Eastern Borosi
Mid-April, the company announced that it has two rigs drilling in the Eastern Borosi land package (EBP), taking advantage of the low sulphidation gold-silver vein deposits.
The project covers an area of 176 square kilometers and contains NI 43-101 Inferred Mineral Resources with 700,500 ounces of gold and 11.4 million ounces of silver. These resources are found in six epithermal vein-style deposits with a combined 4.4 million tonnes averaging 4.93 g/t Au and 80 g/t Ag.
The area is located in the “Mining Triangle” of northeast Nicaragua, which has produced over eight million ounces of gold. However, this area remains significantly underexplored.
Calibre Mining stock went down by 2.24 per cent to $1.52 on the Toronto Stock Exchange.
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