- Magnetite Mines (MGT) is expecting to receive royalty payments from the Rothsay gold operation, owned by Silver Lake Resources (SLR)
- The company said it has been advised by Silver Lake that Rothsay will begin processing ore and selling it in the second half of 2021
- Both companies signed an agreement 13 years ago, guaranteeing Magnetite up to $595,000 in royalties from the operation
- MGT has welcomed the news that payments will begin next year, as well as the additional cash for its balance sheet
- Shares in Magnetite Mines are trading flat at 1.4 cents each
Mining stock Magnetite Mines (MGT) has come into cash, announcing it will soon receive payments from the Rothsay gold operation.
Magnetite Mines and Silver Lake Resources (SLR) — the owner of Rothsay — signed an agreement relating to the gold operation back in June 2007.
Under the agreement, MGT is entitled to $10 per ounce of gold extracted from Rothsay, once Silver Lake has sold 10,000 ounces.
The royalty payments will end once they reach the cumulative amount of $595,000.
Magnetite has today advised its shareholders it expects to start seeing royalty payments from Silver Lake next year.
In particular, SLR is expecting the ore from Rothsay to be processed and sold from the second half of 2021.
Commenting on the future payments, Magnetite Mines Chairman Peter Schubert said the extra cash was very welcome.
“The royalty payment will be welcome additional cash flow that the company intends to apply to its accelerated development strategy for the Razorback High-Grade Iron Ore Project in South Australia,” he said.
Shares in Magnetite Mines are trading steady are 1.4 cents each at market close.