24/11/2020 - 15:55

South32 sells metal royalties

24/11/2020 - 15:55

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South32 has agreed to sell a package of mining royalties to a Canadian business for $US55 million ($A75 million) in cash and shares.

South32 sells metal royalties
Graham Kerr says there is strong appetite for exposure to standalone royalty investments. Photo: Attila Csaszar

South32 has agreed to sell a package of mining royalties to a Canadian business for $US55 million ($A75 million) in cash and shares.

It is selling three gold royalties and one non-gold royalty to Elemental Royalties, which will pay $US40 million in cash and issue $US15 million worth of shares to South32.

South32 chief executive Graham Kerr said there was a strong appetite for exposure to standalone royalty investments.

“The proposed transaction will realise a cash payment, while retaining exposure to these royalties through a shareholding in Elemental,” Mr Kerr said.

“Separately, we continue to hold a portfolio of royalties weighted towards base metals.”

The transaction remains subject to a number of approvals including from Australia’s Foreign Investment Review Board.

Elemental is a gold-focussed royalties business, founded by chief executive Frederick Bell in 2016.

South32 shares closed up 3 per cent to trade at $2.43.

  

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