Sydney-based Royalco Resources Ltd (ASX: RCO) which in the past has gained a substantial amount of its income from gold mining on New Zealand’s South Island, is still going ahead with the sale of its current prime asset.
About two months ago Royalco announced it was planning to sell its 1% beneficial interest in the Weeks Royalty on oil and gas production in Bass Strait, and that independent director Geoff Barker would lead this sale.
There was an update to say this was progressing and Barker gave another update last week saying offers had been received and Royalco was in the process of negotiating with these parties.
Clearly Royalco is wanting to get cashed up, after an essentially new board cut costs and made board changes and was hoping to capitalise on the improved oil and gas prices to sell out.
A few years ago the then Melbourne-based company was getting a healthy income out of a royalty on gold production by OceanaGold Corporation at the Globe-Progress open cut at Reefton. That royalty expired before OceanaGold decided to mothball Globe-Progress.
Royalco still retains a royalty right to the Sams Creek gold project near Takaka but must now await a change of ownership. The 80% owner MOD Resources Ltd (ASX: MOD) has onsold its interest to planned Perth-based IPO Condamine Resources which is yet to raise its capital.
The other 20% stake in Sams Creek is held by OceanaGold, and MOD also owns 100% an along-strike prospect.