Red Rock Resources PLC (LON:RRR) revealed Friday that it has sold its gold royalty in Colombia back to Soma Gold Corp., the mine owner of the El Limon mine and mill.
The company’s shares have risen around 0.3% following the news.
The consideration for the royalty comprises £1,000,000 in cash and 200,000 share subscription rights in Soma Gold, exercisable for 36 months at C$2 per share.
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The subscription rights mirror the terms of Soma’s recent private placement concluded on August 29, 2025, including an accelerated exercise provision.
The royalty, held since 2015, entitles Red Rock to a 3% net smelter return (NSR) royalty up to $2,000,000 and a 0.5% NSR royalty on the next $1,000,000. Despite expectations of resumed payments later this year, the royalty has not generated income for Red Rock for several years.
Red Rock Chairman Andrew Bell commented that the sale provides the company with immediate cash to reduce liabilities and bolster working capital, aligning with the company’s strategic priorities outlined on July 21, 2025.
He believes the total consideration of approximately USD1,350,000, including the warrants, represents a fair value.
The sale allows Red Rock to receive immediate payment, eliminating exposure to the operational risks associated with the gold assets.
While the sale price is below the £1,500,000 valuation carried on Red Rock’s books, the accelerated cash inflow is deemed beneficial.
Red Rock Chairman Andrew Bell stated, “The sale of the royalty back to the mine owner gives Red Rock cash to extinguish liabilities and support working capital, consistent with the priorities set out in our announcement of 21st July 2025.”
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