Agnico sheds entire 18% stake in Royal Road

Agnico Eagle Mines (NYSE, TSX: AEM) says it has sold its entire 18% shareholding in copper-gold explorer Royal Road Minerals (TSXV: RYR) for proceeds of about C$5.51 million.

The shares, totalling nearly 47.9 million, were sold at 11¢ each. This represents a 6% discount over Royal Road’s market open price of 16¢ on Monday, the day of Agnico’s disclosure. On Tuesday, it again traded at 16¢ apiece, for a 3.1% intraday gain and a $39.9 million market capitalization.

The share sale, says Agnico, was made to “monetize its investment” in Royal Road, resulting from the company’s periodic review of its growth portfolio. It follows recent comments by its CEO that the company is fully focused on organic growth. Royal Road currently has three development projects in Morocco, Saudi Arabia and Colombia, respectively.

Agnico has been a long-time shareholder of Royal Road, and in May 2019, the Canadian gold miner more than doubled its holding with a C$5.2 million equity investment. At the time, the shares were bought at 20¢ apiece.

In a larger move to generate cash for its growth initiatives, Agnico sold earlier this month its entire stake in Orla Mining (TSX: OLA; NYSE: ORLA) for nearly C$561 million.

Rio2 steps in

On the same day of Agnico’s divestment, Royal Road welcomed Rio2 (TSX: RIO) as its newest shareholder, following the purchase of around 39.8 million shares, or 15% of its outstanding stock.

“Rio2 is a bold and dynamic company with an exceptional record of developing world-class gold projects, and their leadership team brings decades of entrepreneurial and executional excellence,” Tim Coughlin, president and CEO of Royal Road, stated in a press release.

“We view Royal Road’s portfolio as geologically attractive and believe it provides us with interesting options for future diversification and growth,” Alex Black, executive chairman of Rio2 said.

Rio2’s main asset is the Fenix gold oxide project in Chile. With nearly 5 million oz. in measured and indicated resources, Fenix represents one of the largest undeveloped gold projects in the Americas. Construction of the proposed mine is currently underway. Once built, it is expected to produce 81,900 oz. of gold annually over a 17-year life.