Renaissance receives royalty reprieve

Perth-based gold miner Renaissance Minerals has announced a revised royalty deal with OZ Minerals that will remove the requirement for Renaissance to pay $22.5 million in milestone payments associated with its Cambodian gold project.

Renaissance will pay Oz a 1.5 per cent gross smelter royalty on production from the Okvau and O’Chhung projects, capped at $22.5 million in total.

This royalty will be paid to Oz instead of two lump sum cash milestone payments Renaissance agreed to pay when it acquired the project from Oz in 2012.

The removal of these milestone payments is intended to allow Renaissance to more easily commence production at the site.

Under the previous agreement, Renaissance was set to pay Oz $10 million upon a decision to mine, and then a further $12.5 million six months after production of gold began.

Renaissance managing director Justin Tremain said that the milestone payments had been an obstacle to the company beginning mining at the site.

“We would like to acknowledge the support shown by Oz Minerals in agreeing to the restructure of these milestone payments,” he said.

“The restructuring of these payments removes a significant impediment to the development of the Okvau gold deposit,” he added.

Shares in Renaissance were flat today, trading at 3.9 cents.