Altius Minerals wins arbitration decision on Nevada gold royalty rights

Altius Minerals (TSX: ALS; US-OTC: ATUSF) says it’s won a partial arbitration ruling that could give the company expanded royalty rights over the Silicon gold district of Nevada. Shares of Altius rose on the decision.

An arbitration tribunal determined the lands subject to its 2015 royalty agreement with AngloGold Ashanti (NYSE: AU) not only include the entire 26.6-sq-km base area of interest as described in the agreement, but also certain contiguous/adjacent lands that extend beyond the area.

Shares in Altius closed 3.3% higher on Friday at $27.94, valuing the company at $1.3 billion. AngloGold Ashanti stock closed unchanged at US$25.98 in New York. 

The royalty agreement grants Altius a 1.5% net smelter return on the Silicon project located in Nye county. It consists of two discoveries, the Silicon and Merlin deposits, AngloGold made after taking over the project in 2017.

Pros, cons

The arbitration decision is positive for Altius as it “provides more clarity on the royalty lands and is more than just the base royalty,” Raymond James mining analyst Brian MacArthur said on Friday. 

However, the ruling excludes Bullfrog, expected to be the first of AngloGold’s Nevada operations to enter production, reducing the potential for nearer-term cash flow to Altius, he said. 

The parties now have 60 days to dispute the ruling’s scope over the lands and submit counter claims to the tribunal. The panel is to rule on the claims in a final order. 

Silicon, Merlin

Silicon has an initial resource of 3.37 million oz. in the inferred category (120.44 million tonnes at 0.87 gram per tonne gold) for the oxide portion of the Silicon deposit alone. Exploration by AngloGold has also indicated significant oxide ore bodies existing at the Merlin deposit.

The ruling applies the royalty to essentially all of the southernmost extension of the Merlin deposit beyond the base area of interest, Altius said. 

However, certain lands that AngloGold acquired from third party entities such as Coeur Mining (NYSE: CDE) and Corvus Gold (which it bought in 2021), with a staking date prior to the date of the royalty agreement, would be excluded from the royalty. 

These areas host several historically identified mineralized areas including the North Bullfrog and Motherlode areas being developed by AngloGold.