McWatters trims its Kiena royalty (March 12, 2004)

McWatters Mining (MWA-T) has agreed to sell a portion of its Kiena mine royalties to Wesdome Gold Mines (WDG-V) for $700,000.

Earlier this year, McWatters sold the Kiena property to Wesdome, but kept a 4% net smelter return royalty on existing resources and a 2% nsr on any new resources found on the property.

Under the latest deal, McWatters’ royalty will be reduced to 2.5% on all resources to be processed from Kiena.

The original deal also called for Wesdome to pay McWatters $1.50 per tonne to process up to 5 million tonnes of ore from any source at Kiena’s mill, with the rate falling to $1 per tonne, thereafter. The rate under the new deal is $1 per tonne. Wesdome is still on the hook for an additional $1 million once the Kiena mill resumes commercial production.

Wesdome also retains a first right of refusal on any of McWatters’s remaining royalty interest at Kiena.

A formal agreement is expected by the end of March.