AngloGold Ashanti’s affiliate Compañía Kedahda has signed an agreement to sell interests in Northern Colombia Holdings to Royal Road Minerals.

The transaction comes as AngloGold Ashanti seeks to refocus its attention on its portfolio of projects in Colombia.

Northern Colombia owns Exploraciones Northern Colombia (ENC), which in turn owns an exploration title package comprising mining concession agreements covering around 36,000ha of land.

The package includes the rights to acquire mining concessions over around 215,000ha of land in prospective mineral belts in Colombia’s Nariño, Cauca and Antioquia departments.

In Colombia, AngloGold Ashanti will focus on its key projects, particularly in Quebradona and Gramalote.

The sale of the exploration title package under Northern Colombia represents around 70% of the area of the exploration titles that are outside of AngloGold Ashanti’s three key projects in Colombia.

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Once the transaction closes, the company will receive about $4.6m in cash payment from Royal Road.

Royal Road will also pay a number of additional fees in relation to the discovery of new mineral deposits: $5m upon the declaration of an inferred mineral resource of greater than one million gold equivalent ounces, a further $5m upon completion of a feasibility study and a final $5m on the start of commercial production at any project.

“Once the transaction closes, Compañía Kedahda will receive about $4.6m in cash payment from Royal Road.”

In the first year, AngloGold Ashanti will also receive $20m in four equal quarterly payments following the commencement of commercial production for any specific project.

The transaction will increase Royal Road’s portfolio of potentially Tier 1 exploration assets and also provides various options for joint venture and cash generating transactions in Colombia.

The closing of the transaction is subject to certain conditions, including the closing of a capital raise of at least $3.5m by Royal Road. It is also subject to the receipt of certain regulatory approvals from Royal Road and AngloGold Ashanti.