South Africa's AngloGold Ashanti (JSE:ANG) (ASX:AGG) (NYSE:AU) is selling its stake in Northern Colombia Holdings to Royal Road Minerals (TSX-V:RYR) as it looks to focus on its other local exploration projects, which have longer shelf life and the ability to deliver higher returns.
The company said the sale includes mining concession agreements covering approximately 36,000 hectares and the rights to acquire further licences.
The gold miner is keeping its key local projects - Quebradona and Gramalote.The transaction, noted AngloGold, supports its broader strategic objective of keeping a focused portfolio, with its key projects in Colombia being Quebradona and Gramalote.
As part of the deal, Royal Road Minerals will pay AngloGold around $4.6 million in cash, with further payments amounting to $35 million in total if certain milestones are reached.
Today's transaction transforms Royal Road into a major player in one of the world's most prospective gold districts. Savvy investors rushed to grab some shares in the Toronto-based company, pushing the stock up by almost 38% to 11 cents Canadian in early trading.
Over the last few months, AngloGold has been shedding non-core assets and operations. Last year the company announced the planned sale of its interest in its Sadiola mine in Mali, and it is now in the midst of offloading Cerro Vanguardia, in Argentina.
The miner, the world's third-biggest gold producer, also has operations in South Africa and Australia.