TSX-listed Altius Minerals and Nasdaq-listed Royal Gold have entered into an agreement with Vale Canada to settle litigation related to the calculation of the royalty in respect of all concentrates produced from the Voisey’s Bay mine, in Newfoundland and Labrador.
The Voisey’s Bay 3% net smelter return royalty is directly owned by the Labrador Nickel Royalty partnership, of which Altius is a 10% owner and a subsidiary of Royal Gold is a 90% owner.
The parties agreed to a new method for calculating the royalty regarding concentrates processed at Vale’s Long Harbour processing plant, which will be effective for all Voisey’s Bay mine production after April 1 this year.
Altius expects the 3% royalty rate will apply to about 50% of the gross metal value in the concentrates at existing nickel, copper and cobalt prices, after accounting for acceptable processing and marketing-related charges and metal recoveries.
As those metal prices rise or fall, the percentage of gross metal value in the concentrates applicable to the royalty would correspondingly increase or decrease.
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