Rio Tinto has closed the deal to offload its royalty on an area in Nevada, US, to Royal Gold’s wholly owned subsidiary RG Royalties for a cash consideration of $525m.

The divested area includes the Cortez mine operational area and the Fourmile development project.

The deal provides the royalty firm with an effective 1.2% gross royalty in an area within the Cortez complex, which started production in 1969.

The Cortez complex is owned by Nevada Gold Mines (NGM), a joint venture between Newmont and Barrick Gold. The complex excludes the Fourmile development which is owned by Barrick.

Rio Tinto obtained the royalty after selling its 40% stake in the Cortez Complex to Barrick in 2008.

The mining giant said that the payments will start once the complex’s total production reaches 15Moz of gold. This is anticipated to happen ‘imminently’, it said.

Rio Tinto chief financial officer Peter Cunningham said: “This transaction unlocks hidden value from our portfolio and releases cash immediately.”

Royal Gold expects the acquisition to increase its exposure to the Cortez complex.

Royal Gold president and CEO Bill Heissenbuttel said: “Royal Gold’s first royalty interest was created at Cortez, and it will always be considered as the cornerstone asset for the company we are today.

“Our long history at Cortez provides us insight into one of the world’s most prolific gold mines, and we fully expect the exploration prospectivity to continue to provide production growth for decades to come.”