- Dreadnought Resources (DRE) has welcomed a reduction of the net smelter royalty on parts of its Illaara Project
- In June 2019, the company acquired four tenements over the Illaara Greenstone Belt from a subsidiary of mining giant Newmont
- Newmont has agreed to reduce the royalty from 2.5 per cent to one per cent, for $150,000 cash from Dreadnought
- The reduced royalty will apply to four of the seven tenements which the company owns over the Illaara Greenstone Belt
- Dreadnought Resources is up 6.25 per cent and trading at 1.7 cents per share
Dreadnought Resources (DRE) has welcomed a reduction of the net smelter royalty on parts of its Illaara Project.
The Illaara Greenstone Belt is located approximately 160 kilometres north-west of Kalgoorlie, in Western Australia’s Yilgarn Craton.
In June of 2019, the mining company acquired four tenements over the Illaara Greenstone Belt from a subsidiary of Newmont Corporation. In exchange for the acquisition, Dreadnought paid a consideration including $120,000 cash and a 2.5 per cent net smelter royalty.
The four tenements, E30/471, E30/476, E29/957, and E29/959, host a number of prospects including Central Illaara, Lawrence’s Find and the strike extent north of Metzke’s Find.
Dreadnought has now reached an agreement with Newmont, in which the net smelter royalty will be reduced from 2.5 per cent to one per cent. The company agreed to pay Newmont a cash consideration of $150,000 for the royalty reduction.
The reduced royalty will only apply to the four tenements which Dreadnought acquired from the Newmont subsidiary.
The company owns another three tenements over the Illaara Greenstone Belt, which it acquired from two unrelated parties in December 2019. These three other tenements will not be impacted by the reduction.
Dreadnought’s Managing Director, Dean Tuck, commented on the company’s reduction of the net smelter royalty.
“This is a positive development in relation to Illaara and brings the net smelter royalty down to a level that investors are typically used to,” he said.
“We appreciate the constructive approach taken by the Newmont team in relation to this matter,” he added.
Dreadnought Resources is up 6.25 per cent and trading at 1.7 cents per share at 12:10 pm AEDT.