International Royalty grows its business (October 20, 2008)

International Royalty (IRC-T, ROY-x) has snapped up more gold royalties — the latest on the Pinson gold project and trend in Nevada, a joint venture between Barrick Gold (ABX-T, ABX-n) and Atna Resources (ATN-T, ATNAF-o).

IRC has acquired three additional royalties from two private individuals. Under the deal, IRC paid US$2.85 million in cash for a 16.84% share of the variable rate (0.5% to 5%) net smelter return (NSR) Rayrock Royalty and a 40% share of the Cordilleran 3% and 5% NSR royalties.

IRC now owns 97.9% of the Rayrock Royalty and 100% of the Cordex Royalties, the two largest royalties covering the currently known Pinson resource.

Under its joint-venture agreement with Atna, Barrick can earn a 70% interest in Pinson by completing a US$30-million feasibility study by April 2009. Barrick has agreed to submit a feasibility study to the joint venture at the end of the evaluation period in April.

The Pinson project lies at the intersection of the Getchell gold belt and the Battle Mountain-Eureka trend in the heart of Nevada. It is adjacent to Barrick’s Getchell and Turquoise Ridge mines and about 8 miles from Newmont Mining’s (NMC-T, NEM-n) Twin Creeks mine complex.

Pinson is a Carlin-type gold system with micron-gold hosted in altered, fine-grained sedimentary rocks.

Atna’s Pinson deposit has a measured and indicated resource of 2.3 million tonnes grading 14.54 grams gold per tonne for total contained gold of 1.1 million oz. In the inferred category, Pinson has 3.1 million tonnes grading 11.66 grams gold per tonne. The numbers were calculated using a cutoff grade of 6.9 grams gold per tonne.

The announcement today follows IRC’s acquisition on Sept. 4 of four mineral royalties from Atna for US$20 million in cash. That portfolio includes an NSR interest in all precious metals produced from the development-stage Wolverine massive sulphide project in the Yukon.

Management anticipates that IRC’s royalty revenue base will expand this year and next from St. Barbara’s (STBMF-O, SBM-a) Gwalia Deeps project in Australia and Goldbelt Resources’ (GLD-T, GLDRF-o) Belahouro gold project in Burkina Faso, as well as from rev- enues from OZ Minerals’ (OZL-a) recently commissioned Avebury nickel mine in Tasmania and Arch Coal’s (ACI-n) producing Skyline coal mine in Utah.

IRC holds more than 85 royalties, including an effective 2.7% NSR on Vale’s (RIO-n) Voisey’s Bay mine, a sliding-scale NSR on Barrick’s Pascua Lama gold project in Chile, a 1.5% NSR on Inmet Mining’s (IMN-T, IEMMF-o) Las Cruces copper project in Spain and a 1.5% NSR on roughly 3 million acres of gold lands in Western Australia.

In Toronto at presstime, International Royalty traded at about $2.42 per share. It has a 52-week trading window of $2.40-7 per share and has 78.48 million shares outstanding.