Fitzroy River agrees to sell royalty for $17.5M

• Fitzroy River agrees to divest its Bowdens Silver Project royalty interest for $17.5 million.
• The transaction delivers $10 million cash alongside $7.5 million worth of Silver Mines shares.
• Fitzroy River intends to distribute the net proceeds from the sale back to its shareholders.

Fitzroy River (ASX:FZR) has entered into a binding agreement to sell its royalty interest in the Bowdens Silver Project for total consideration of $17.5 million.

The divestment follows the company's August decision to appoint Argonaut Corporate Finance as its exclusive financial adviser for the asset.

Chair Sue Thomas said, "In August the Board set out to establish what the market would pay for the Bowdens royalty and to test that against the value of continuing to hold it."

Under the binding deed, subsidiary Royalco Resources will sell its net smelter return royalty to Bowdens Silver and Silver Mines (ASX:SVL) in exchange for $10 million cash and $7.5 million in equity.

Completion remains subject to Silver Mines raising at least $50 million through a placement and Fitzroy River receiving necessary approvals under ASX rules.

Following the announcement, the Fitzroy River Corporation share price was unchanged at $0.32.

The target royalty comprises a 2% net smelter return over EL5920 that drops to 1.00% after US$5 million in total receipts.

Fitzroy River holds no operational responsibilities at the Bowdens Project, which is located 26km east of Mudgee in New South Wales.